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Nondisclosure agreements can be essential to Irvine businesses

Successful businesses in California often rely on information that they keep under wraps in order to protect their interests. However, what happens if an employee or other party tries to share or even steal information meant to be confidential? This could spell financial ruin to a company. For this reason, many businesses have contracts known as nondisclosure agreements.

Mainly, nondisclosure agreements are used in instances in which an employer wants to share confidential information with another person but doesn't want the person to utilize this information without the employer's permission. For example, a nondisclosure agreement can come in handy when it comes to sharing information such as inventions, products or marketing information with partners, investors, buyers or employees.

In general, there are two types of nondisclosure agreements: mutual and nonmutual agreements. Nonmutual nondisclosure agreements are used if only one party would be sharing business secrets with the other party. Mutual nondisclosure agreements are used if both parties are sharing business secrets with each other.

Also, nondisclosure agreements need not be overly complex. The main parts of a nondisclosure agreement include identifying the parties to the agreement, defining what is to remain confidential, the scope of the receiving party's duties regarding the confidential information, whether there are any exceptions to the nondisclosure agreement, and how long the nondisclosure agreement will last.

Nondisclosure agreements are common and important business contracts. They protect businesses from losing key information necessary for the business' success. However, because an improperly drafted nondisclosure agreement may not be enforceable, it can help to have a contract law attorney draft the agreement to ensure it is legally sound.

Source: Forbes, "The Key Elements Of Non-Disclosure Agreements," Richard Harroch, March 10, 2016

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