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5 Questions Your Non-Disclosure Agreement Should Answer

A non-disclosure agreement (NDA) is a contract that can help keep your trade secrets safe and your employees loyal. If written correctly, a NDA can stop a former employee from sharing what makes your business a success, from secret recipes and procedures to client lists and pricing strategies.


However, it’s important to know that your NDA might be useless if it isn’t written correctly and if it doesn’t contain the correct information. All non-disclosure agreements should answer the following five questions:

  • Who is receiving and who is disclosing information? NDAs are either go one way, in which one party is disclosing information and the other is receiving it, or two ways, in which both parties are exchanging information.
  • What is the information being disclosed? Be specific about what information the employee or contractor cannot disclose. If that information is unclear, your NDA might not hold up in court if a problem arises.
  • How may the disclosed information be used? Again, if you aren’t specific about how the information should be handled (can it be shared with clients?), you are just asking for it to be mishandled. The more details you include, the safer your information will be.
  • How long must the confidant keep the secrets? Some trade secrets, like product development information, only need to be kept until a new product launches. Other trade secrets, like client lists, might be useless after a few years. Your contract should specify a time frame for when the information can be safely disclosed.
  • What will happen if the contract is breached? Does your NDA include a penalty for sharing or using the information in certain ways? If not, there may not be a good reason for the other party to keep your trade secrets quiet.

Does your business need assistance with an NDA? Call the Voss Law Firm to speak with an experienced Texas business attorney at 888-614-7730 or fill out our secure electronic contact form.

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