Non-Disclosure Agreement

A non-disclosure agreement also known as confidential agreement is a legal contract between parties with the sole purpose of legally forbidding parties from disclosing confidential information that has been shared together in the course of a commercial or employment relationship to any third party. Breaking a non disclosure agreement triggers a host of legal ramifications, including lawsuits, financial penalties and even criminal charges.
A non-disclosure agreement can be either unilateral agreement or a mutual agreement, which is dependent on the party providing the secret information. Non-disclosure agreement is used to define confidential information that can be disclosed and what information cannot be disclosed. It is also used to protect information from being disclosed and sets out the consequences of a breach of the non-disclosure agreement. A non-disclosure agreement is as binding as a contractual agreement and it gives an assurance that where there is a breach of the agreement by one party the other can seek redress for damages resulting from the disclosure of information. Most standard non-disclosure agreement contains the following clauses
1. Parties
2. Definition of confidential information
3. Obligation by the recovering party
4. The term of the agreement
5. The exclusion clause
The importance of a non-disclosure agreement cannot be overemphasised as it protects the interests of the disclosing party, particularly its trade secrets and domestic secrets. It also helps in the preservation of trust relationships as it prevents the leaking of unwanted information. It also boosts the confidence of the parties to the non-disclosure agreement as they are aware of individual obligation and the scope of same non-disclosure agreement gives the assuredness that when there is a breach by the defaulting party, there is room to seek for redress as their rights are duly protected .The commercial implication of a non-disclosure agreement is to impose mutual duty of confidentiality on the parties.
Having a written agreement helps define the standard of care which is required by the receiving party which is or not less than the same level of control of care the receipt party uses to protect its own confidential information but such must not be less than the reasonable care expected. The standard care imposes precautionary care on the receiving party is equally imposed on its employees if any or whomever may have access to the confidential information of the disclosing party.
Reliefs granted under the non-disclosure agreement to an aggrieved party are
Damages – the aggrieved party may seek monetary compensation for any damages or loss arising from the breach of the non-disclosure agreement or necessary for enforcing the compliance of same.
Injunctive relief – it is not enough that the aggrieved party is reimbursed for the financial losses; the aggrieved party may also in addition prefer to retract the information from the reach of the public and the use of same. This can be achieved by an order of injunction either restraining the defendants or compelling the defendant from using or further disclosure of the information.
Account of profits – there’s an order from the court compelling the defendant party to give account of the profits made as a result of infringement. This strips the defendant of the profit made from the breach of the non-disclosure agreement
As there are remedies available for the aggrieved party there also defenses available for the defaulting party which are
Legal compulsion: The defendants will be exonerated when it is bound to disclose the information under some legal compulsion or obligation
just Causa : the defendant will be excused of any breach ,where such is as a result of fraudulent act inequity and criminal behaviour on the part of the aggrieved party .
Exclusion clause: the defendant will be excused of all liability(s) if the information disclosed is already known to the public or was disclosed to the defendants Party by a third party who is not party to the agreement.
In summary the purpose of a non-disclosure agreement is to enable parties to a commercial transaction reveal its confidential information to the other party for a limited period of time and only for a specific purpose while the parties negotiate and engage in business transaction.

By: Nkechi Bright-Ewere