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Key NDA considerations: scope and enforceability

On Behalf of | Jun 29, 2021 | Business Law |

Business entrepreneurs and proven company principals spanning Kentucky wear many hats.

Put another way: Key decision makers in enterprises across the state customarily have a lot on their minds. Their mindset is broad-based, with ample time and creative energy being expended on a wide universe of matters. Those can potentially range on any given day from entity formation concerns and business plan adjustments to regulatory compliance, labor relations and the safeguarding of proprietary information.

That last-cited concern is spotlighted below in today’s blog post.

Key points to note regarding nondisclosure agreements

First of all, a quick note on terms: A nondisclosure agreement is often referred to in various ways. Suffice to say that shorthand and full-blown descriptors like NDA, confidentiality agreement and secrecy agreement all mean the same thing.

Their relevance in the legal realm can be underscored by reference to a central observation made in an in-depth legal overview of NDAs.

That source notes this: “Information is power.”

Logically, company managers want to ensure the fullest possible protection of their intellectual property, trade secrets and other closely guarded data, shielding it from third-party misappropriation and possible misuse.

The execution of a nondisclosure agreement is one time-honored strategy for doing that.

NDAs are flatly common in the commercial realm, being signed by individuals ranging from employees, business partners, contractors, suppliers, vendors, lenders and many other parties.

Their utility is not in doubt. Sometimes, though, their enforceability is questioned.

Your NDA seems polished and tailored. Is it enforceable?

The quick answer to the above header query is … maybe.

Or maybe not. What a disclosing party might deem to be reasonable restrictions is often challenged later by a receiving party on grounds of alleged overreach. Courts examining NDAs routinely look closely at whether a confidentiality agreement is reasonably confined or, rather, vague and burdensome.

A number of factors can play into judicial determination on that score. A party that is either seeking to enforce an NDA or have it adjudged as unenforceable can benefit from the timely and on-point counsel of a proven business law legal team.

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