What is a mutual nondisclosure agreement

What is a nondisclosure agreement?

The following topics should be included in the document so that the non-disclosure agreement has all the important key data.

Extent of cooperation and confidentiality

Under this point, the participants define the type and scope of the joint project, the term "confidentiality" and the specific concern that is to be kept secret.

Contracting parties

The names of the people involved or the companies involved, including their addresses, are recorded under this point. In any case, they must be legally competent persons.

Specific subject matter of the contract

Here the contracting parties define all information to be treated confidentially. All papers, documents and confidential information to be kept secret must be recorded here. The same applies to actions and statements by individual participants that are not intended to be made public. The more precisely you work here, the more extensive the protection. It is also advisable to delimit information that is not part of the subject matter of the contract.

Duration of the duty of confidentiality

The confidentiality timeframe is critical. Many nondisclosure agreements are concluded for an unlimited period of time. However, there are also cases in which a legitimate interest in passing on the data requires a deadline.

Penalties for non-compliance

If a person or a company has decided to draft a confidentiality agreement, it ismakes senseapunishmentatViolationtodefine.

Explanation should be adapted to the circumstances

There are several on the Internettemplate for confidentiality agreements that can be used free of charge. However, users should definitely do thisadapt to your own needs. It is very important to adapt the clauses according to the circumstances specific to the situation. They should also precisely define what the other side is allowed to do and what actions are taboo. In particular, the rules on compensation should be formulated precisely. If these are unspecific, an experienced contract partner will notice this very quickly.

Severability Clause‌

In the legal language, a severability clause is understood to be a provision that regulates the legal consequences that should arise if individual parts of the contract turn out to be ineffective or impracticable or if questions remain that the contract should have answered.

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Breach of contract and consequences If there is a breach of contract, for example because someone involved passes on secret information, the contractually stipulated sanction becomes due. It is important to distinguish between contractual penalties and claims for damages.

Contractual penalties Contractual penalties are to be paid whenever a contractual partner can be proven beyond doubt that he is guilty of breaching the confidentiality obligation under the NDA. Whether this actually caused economic damage is initially irrelevant. If necessary, compensation is to be paid.

The amount of the contractual penalty plays a decisive role. If the amount is less than 5,000 euros and a dispute arises, the district court of the respective municipality is responsible. These are often not only chronically overloaded, but also have little experience in these subject areas. If the amount in dispute is above this threshold, jurisdiction is transferred to the respective regional court. The more competent chambers of commerce and trade are affiliated here, which is an advantage for the plaintiff.

Compensation If the indiscretion results in economic damage, the amount of the compensation must be proven in detail. The contract breaker bears this damage.

Obligation to provide evidence A declaration of confidentiality alone does not guarantee legal success in the event of information disclosure. Ultimately, the injured party has to prove that the indiscretion originated from the other contracting party. To do this, it is necessary to ensure that the confidential information has not been tapped elsewhere. Possible scenarios that could be imagined are conversations with acquaintances, carelessness when handling files or an inadequately secured e-mail account.

Limits of a confidentiality agreement When drawing up a confidentiality agreement, freedom of contract applies. This means that the parties can freely determine the content as long as they adhere to the law. These are exceeded if the agreement is too broad and subjects too much to secrecy. In this case, the legislature speaks of an immoral restriction on the contractual partner that would restrict his entrepreneurial freedom.

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Not all business partners are willing to sign an NDA Due to the high expenditure of time and effort, not all potential business partners are willing to sign a confidentiality agreement. While nondisclosure agreements are common for larger industrial deals, investors in particular are often unwilling to sign relevant papers. The amount of time and money that has to be expended to check the contracts and to change corresponding passages if necessary are often in no relation to the investment amount. This can, for example, concern investments in start-up companies.

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