Some businesses have closely held trade secrets that they must protect. It’s imperative that they take the proper steps to do this. Having people who have access to those trade secrets sign a nondisclosure agreement may help to do this.
There are many considerations that come with a nondisclosure agreement. There are five specific elements that must be present in all of these agreements.
What are the five elements?
The five elements that must be included in all nondisclosure agreements include:
- The disclosing party and the receiving party
- The information that’s covered by the agreement
- The requirements of the agreement
- Any exclusions that are present
- The length of the agreement
In order to be considered a lawful nondisclosure agreement, all five of those have to be included. If even one of them is missing, the agreement will be considered unenforceable. Even when those points are all present, there’s a chance that it might not be enforceable.
What conditions might lead to an unenforceable agreement?
There are many conditions that might lead to a nondisclosure agreement being deemed unenforceable. Some of the more common ones include:
- The damages caused by a breach of the nondisclosure agreement are difficult to quantify
- The discloser tries to hold a third party to the nondisclosure agreement
- The agreement terms are too broad or are unreasonable
- The information would have been inevitably disclosed
Any business that has active nondisclosure agreements can take legal action if the agreement isn’t followed. Discussing the matter with your attorney can help you determine what steps you need to take and what remedies might be available.