Wednesday, August 24, 2011

NDAs: Pointers (Part 1 of 2)

I often get questions about drafting or reviewing a Non-Dislcousre Agreement, and so below is Part I of a two-part outline of key points relating to NDAs.

1.  There are two types of NDAs:  (a) Mutual Non-Dislcosure and (b) non-mutual NDAs.  If you are the disclosing company, you will want to draft the NDA and will want a non mutual NDA -- if you can get away with it. 

2.  Should I sign an NDA:   Most investors and party's receiving NDAs hate to sign them, but if you are the disclosing party you should insist.  If you are the receiving party, you can refuse, but don't be surprised if the potential disclosing party refuses to continue business discussions with you.

3.  When should I demand an NDA:  If you are going to negotiate any type of business arrangement (including, but limited to, investment, consulting, service, development, licensing, manufacturing, marketing, distribution agreements) you should demand the other party signs an NDA before you disclose any confidential information about your company or the project.

4.  Can't I use one I found on-line:  Do not just find an NDA online and use that one -- in Part 2 of this discussion, I will set forth some terms that you need to make sure are included in the NDA.

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