Non-Disclosure Agreement

What does my business need a confidentiality agreement for and why?

Current or future cooperation with other companies (e.g. suppliers, customers or business partners) often requires the use or transfer of “know-how” and “business secrets”.

To ensure that the trade secrets are only used within the agreed purpose (e.g. for a project or collaboration.), contractual agreements must be made in advance to ensure the protection of the information transferred.

This is done through a confidentiality agreement, a so-called “Non-Disclosure Agreement” (NDA).

What types of non-disclosure agreements exist and what are their effects?

A distinction is made between so-called unilateral (mutual) NDAs, in which only one party discloses business secrets, and mutual NDAs.

If the other party violates the NDA, e.g. by making trade secrets of your company public or by unauthorized use or exploitation of the information by the other party, it is very difficult – without contractual provisions – to prove the damage caused. This is where the NDA comes into play – in the event of a breach of confidentiality, the other party is obliged to pay a contractual penalty.