Businesses must always take steps to protect themselves from potential harm, which could cause loss of revenue. One of the ways to stay safe is to protect your business with a non-disclosure agreement. The non-disclosure agreement, NDA, is essential for use with employees, subcontractors, and other third parties who may be privy to important business information. A non-disclosure agreement is also sometimes called a confidentiality statement.

Why You Need a Non-Disclosure Agreement

Sensitive information, financial data, business strategies, technology innovations, and marketing plans are all areas of concern for businesses. The worry is that an employee, former employee, or someone contracted for services, could utilize the information in a way that would be harmful for business. Failure to protect your business with this type of agreement is a mistake. An agreement is relatively easy to draft and implement, yet it could save you thousands of dollars or more later on. In fact, it could save your company from ruin.

What to Include in an NDA

The NDA should be as specific as possible and should include exactly the types of information that is considered confidential. It typically includes a list of items that are covered. It should detail the length of time that the NDA is effective. For example, a NDA agreement may state that the contractor must not disclose information for the duration of the contract and for a period of time after the end of the contract. Agreements should also include non-compete clauses that disallow those with information to use it with another organization.

Creating a Non-Disclosure Agreement

A non-disclosure agreement should be created specifically for your company. There are many issues that pertain to your company, which need to be detailed in the agreement. While there are templates available, it is often best to have a business attorney draft or review the document before using it. You will generally be able to utilize the same agreement for all of your needs until such time as changes are required. Keep a copy of the signed document on file in case legal action is required in the future.

Effective NDAs

NDAs may be challenged in legal cases. For this reason, it is essential to put time, effort, and money, into having it professionally written. You may need one NDA for employees and another for subcontractors. You can keep these on file and use them when needed. Be sure to have the document signed by each person before they are hired or begin providing work.

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Protect Your Business with a Non-Disclosure Agreement, or any other litigation matter, please feel free to contact us at 480.461.5300,  log on to,  or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.