Contract Law Archives - Tressler Associates

There’s never just one of anything. In contract law, this is especially true, and non-disclosure agreements (NDAs) are the perfect example of this. NDAs are contracts used by individuals and businesses to share private information safely. They legally bind individuals to share information with promises of confidentiality, save for a few exceptions. These can be shared with new and current employees, business partners, clients, and more. Anyone who might need to know a trade secret, a patent, or some other invention, should sign an NDA. But there are many types of NDAs, so you have to know which one is right for you.

The Three Tiers of NDAs

The different types of NDAs are broken down into tiers. At the top, there are three types, unilateral, bilateral, and multilateral NDAs. The rest of the specific NDA types fall under these three categories. Most are based on who has to sign the NDA. Not all NDAs are created equally, and they can only demand so much secrecy from strangers when compared to their employees.

Unilateral NDAs

To be a unilateral NDA, the NDA has to be one-way. This means that the business or individual is asking you to keep a secret, but isn’t keeping anything secret for you. Sometimes this happens because there is nothing that one side needs the other to keep private during their business arrangements. Sometimes it can also be because a business wants to release or use information from a case study and the NDA has to be one way to use information from it.

Employer-employee NDAs

It’s incredibly common for businesses to require employees to sign NDAs before they can start work. It’s common for businesses to have the intellectual property (IP) that they need to operate their business that also they don’t want their competitors to have. IP that would necessitate an employer-employee NDA contains:

Company-contractor NDAs

If you need to hire temporary contractors for a short-term project or to temporarily fill a spot, you’ll need an NDA. You can’t use the same unilateral NDA for employees as contractors because contractors aren’t your employees. They can be working with other companies while working with you. These other companies may be your competitors, or related to your competitors, so you need to have legal contracts designed for their situation.

Inventor-evaluator NDAs

When someone invents a patent or a prototype, they need NDAs to keep people from stealing their ideas.

Seller-buyer NDAs

When you are selling a product directly to a buyer, you want to make sure that the buyer doesn’t reverse-engineer your product or give any important details to a competitor. A seller-buyer NDA will protect you by limiting one’s ability to share information on:

Bilateral NDAs

These are also known as mutual or two-way NDAs, where both parties require the other to maintain a level of confidentiality. This is common in ongoing partnerships, specifically of the manufacturing kind. If a business needs a manufacturer to make their products and the manufacturer has a production process they want to keep private, a bilateral NDA is perfect for them. They’re also perfect for corporate takeovers, joint ventures, mergers, and acquisitions.

Multilateral NDAs

NDAs of this type include more than two parties. It doesn’t matter if it’s one, two, or all of the parties sharing confidential information, once there are more than two, it becomes a multilateral NDA. Many of the NDA types under unilateral agreements can be multilateral as long as only one party is sharing confidential information. If not, then these NDAs will most resemble bilateral NDAs where there are mutual promises and agreements to secrecy.

Contact Us for Help With All Types of NDAs

Our corporate law attorney has the experience needed to write any of your NDAs. Whether they’re with employees, buyers, sellers, or partners, we have the experience to make what you need. If you need someone to review an NDA that’s been given to your business or employees, we can review it to ensure you can realistically follow it. Contact our team today.

As an attorney, often times clients come to us wanting us to fix a situation after the client has tried to take on a legal matter themselves.  This is completely understandable since I know that my family has to closely watch our expenditures on a regular basis to keep up with the cost of living these days.  However, practicing law without the proper training can cause very expensive problems.  One particular instance that we have seen arise time and time again involves the usage of contract forms from the internet.  Many of these internet forms have numerous problems and/or are often misused.

One major problem with such forms involves the lack of appropriate legal provisions in the documents to fully protect the client’s interest.  Almost all attorneys include an Attorney Fees Provision in any contract they draft.  This often times allows the winner in a subsequent dispute between the parties to recover attorney fees and costs.  A common attorney fee provision would say something like this: “if it is required for a party to this agreement to hire an attorney to enforce the provisions herein, then the prevailing party is entitled to recover their reasonable attorney’s fees and costs”.  This is one of many provisions that are often left out of internet contract forms and the implications can be huge.

When we are hired by a client to fix a problem with an internet form contract it is always after a dispute has arisen between the parties.  A great bargaining tool that an attorney can have in such a dispute is the threat (or promise) that if the opposing side does not comply with our demands then we will sue for not only our damages but OUR ATTORNEY FEES and costs.  The other side does not want to pay their own attorney let alone your attorney fees.  However, if the proper attorney’s fee provision is not in the contract or not allowed by a statute then you cannot legitimately demand attorney fees.  If you can’t demand that they pay your attorney fees then they don’t care if your attorney fees quickly add up.  Many times, the attorney fees in a major dispute can add up to exponentially more than the relatively small amount that it would have cost the client to have an attorney to draft the document in the beginning.

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