David's Blog | Misc ramblings about things in general, work and technical items of interest.



Simple Non Disclosure Agreement Canada

In practice, this means that there is no legislation to seek guidelines in this area and that confidentiality agreements are interpreted in accordance with the common law as specified in the agreement. NDAs can be terminated at any time in the reason, depending on the contract. In general, when the information becomes public (by means other than a breach of the confidentiality agreement), the information loses its confidentiality, so that the information is no longer privileged within the NDA. Many inventors and companies devote a great deal of time and resources to developing new products or building customer bases. It is not surprising and certainly justified that great attention is being paid to ensure that this proprietary information does not fall into the wrong hands. However, to take a promising idea or company to the next level, a company usually needs to share its valuable secrets with potential strategic partners or investors. The signing of an effective confidentiality agreement (“NOA”) can therefore be a decisive step in the development of a new business relationship or opportunity by offering the parties sufficient comfort for this first step. Although standard form NDAs are commonly used, parties should always check whether the agreement is consistent with the particular circumstances and risks. As with all contractual laws, when developing or negotiating an NDA, you remember that seemingly harmless changes can sometimes have unintended consequences (see for example, this blog post on “Time is the essence” clauses and what they actually mean). It is also important to ensure that who can obtain confidential information in order to promote the authorized or specific objective should be determined. It is often necessary to pass on information to employees or professional consultants (or even to sources of funding, related companies or sponsors, etc.), but this should be considered on a case-by-case basis. Ideally, these recipients are identified by name, but should be identified at least by class and always on a “need to know” basis. Parties should be aware of the confidentiality obligations that must be imposed on these third parties in order to obtain confidential information.

Workers may be subject to confidentiality obligations as part of their employment contracts. There are a number of ways to manage the disclosure of professional advisors: a) they could be invited to become members of an NDA, b) they might only have to agree to keep the information confidential, or c) the parties may simply rely on service secrets imposed on them by their professional board of directors. Disclosure parties should endeavour to ensure that the recipient party assumes responsibility for breaches of confidentiality by employees, consultants, related companies and other necessary recipients, although this request may be categorically rejected by the recipient party. If disclosure is required by law or order, an NOA cannot object to this legal obligation. Therefore, NDAs should not have any language of disclosure such as “under any circumstances” or “for any reason,” otherwise the entire agreement may be threatened. However, an NOA should impose an obligation on the recipient party to inform the notifying party of the disclosure request, where possible. The receiving party should only be allowed to disclose such information to the extent expressly required by the applicable law or the applicable regulations. The receiving party should also be required to make reasonable economic efforts to oppose these requests for disclosure, if they are, and, if warranted, to be protected or to continue to treat the information confidentially.

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