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Non-disclosure agreement NDA

اتفاقية عدم الإفصاح - Non-disclosure agreement - corporate law firms in Egypt

The non-disclosure agreement (NDA)

The Non-disclosure agreement NDA is an agreement between at least two parties to protect confidential information shared with them by the other party.

A signed NDA helps the parties in the agreement to protect the confidential information between them not to share by employees or clients and helps also the owner of the sensitive information not to use or copied without authorization from him.

NDAs also protect the sensitive information, new products by the owner which are coming to the market from being copied or used by others, financial information, trade secret, technical data, etc.

The main types of a non-disclosure agreement

Unilateral, in which only one party demands confidentiality

A unilateral nondisclosure agreement – sometimes referred to as a one-way nondisclosure agreement – involves two parties
Where only one party (ie the disclosing party) expects to disclose certain information to the other party (ie the receiving party)
Protecting information from further disclosure for some reason requires, for example, maintaining the confidentiality necessary to satisfy patent laws.

Bilateral, in which both sides demand confidentiality

A bilateral nondisclosure agreement – sometimes referred to as a mutual nondisclosure agreement or a two-way nondisclosure agreement –
Includes two parties in which both parties expect to disclose information to each other and which each intends to protect from further disclosure
This type of non-disclosure agreement is common when companies cooperate on some joint venture or wish to merge.

Multilateral, which includes more than three parties, all of whom demand confidentiality

Multiple non-disclosure agreements consist of three or more parties where at least one party expects to disclose the information to the other parties.
This type of non-disclosure agreement eliminates the need for a separate unilateral or bilateral non-disclosure agreement between only two parties.

For example, a single multilateral nondisclosure agreement entered into by three parties each intending to disclose information to the other parties could use in place of three separate bilateral nondisclosure agreements between the parties.

Elements of a Non-Disclosure Agreement (NDA)

The agreement can include any information that agrees upon between the two parties, but whatever this information and its size, the agreement must include 6 main elements:

  • Clearly identify confidential information that should not disclose.
  • Determining the exceptional cases in which disclosure.
  • Mention the names of the signatories to the agreement.
  • Determining the time periods during which the non-disclosure should make.
  • Determining the uses by the other party upon knowledge of confidential information.
  • Mention the legal provisions involved in the event of non-compliance with the agreement.

How NDAs Work and Why They’re Important?

NDAs usually take part when you are entering a new deal with another party and you ask a consultant and you want to ensure that the information you gave to the consultant is not to share with others.

The best way to protect your information is to sign with the consultant an NDA, start a new project with another party, and also during mergers and acquisitions.

NDAs are important for the owner to protect the confidential information contained in the agreement and it binds the parties the secrecy for the parties to share the confidential information with other parties.

Not in the agreement and if they used the information with others, they will face penalties by the signed NDA for sharing the confidential information with other parties, not in the agreement.

Advantages and Disadvantages of an NDA

The primary benefit of an NDA is that sensitive information regarding your company is kept secret.
This can be anything from research and development (R&D), possible future patents, finances, negotiations, and more.
Signing an NDA is a way to protect private information from becoming public.

Non-disclosure agreements are also clear. They specify what and what cannot disclose to avoid any confusion.
NDAs can also create at a low cost as they are really just a signed piece of paper.
This is one of the most cost-effective ways to maintain private information.

These NDAs also outline the consequences of disclosing prohibited information, which should prevent any leaks.
Furthermore, NDAs are a good way to maintain comfort and trust in a relationship.

One of the primary disadvantages of an NDA agreement is that it starts a relationship off on the idea of mistrust.
This can set the tone of the relationship and may not always result in a positive one.
Employee NDAs can also prevent top-tier talent from joining your firm, knowing they’d limit in discussing their job in the future.

Similarly, asking current employees to sign NDAs when working on special projects may sour their experience of working for the company as they will feel less trusted.

NDAs can also result in potential lawsuits if breached, becoming a headache for everyone involved.

Pros

  1. Information kept private
  2. Clarity on what information can and cannot be shared
  3. Low cost to create
  4. Outlines consequences

Cons

  1. Can create an atmosphere of mistrust
  2. Risk of deterring top-tier talent from joining the firm
  3. Can possibly sour the relationship with current employees

What Happens If You Break a Non-Disclosure Agreement?

NDAs like any agreements, any break for the Non-Disclosure Agreement by the parties will be facing lawsuits by the other parties in the agreement.

If there is a breach of confidentiality the party that disclosed the information may be liable for monetary damages depending on the severity

Also, an NDA includes terms if there is any breach from any party and its changes from NDAs to others.

How MNL will help you?

MNL (Mohamed Nasser Law Firm) will help you by drafting a Non-Disclosure Agreement that protects you from any copying or using your confidential information for your deals or projects.