Non-Disclosure Agreement

Term for a confidentiality agreement. In most jurisdictions such NDAs need to be reasonable in time and scope and cannot survive the loss of confidentiality of the underlying information used to support them. Typically a non-disclosure agreement will have a set of exceptions, including:

  • information generally available to the public;
  • information the recipient obtains independently from another source;
  • information the recipient may have received from the source, but was already in provably possession of when it received it;
  • information that is published by someone other than the recipient (i.e., the source makes it public, intentionally or accidentally.)

In employment law in particular, an NDA which renders it difficult for someone to obtain work in his/her profession without moving to another area will often be considered an illegal non-compete agreement, rendering the NDA unenforceable. For this reason, when including NDAs in employment agreements, it is wise to carefully consider whether the NDA goes too far, covers information which is not competitively important, or would make it very difficult for a skilled employee to find employment in their professional area.

It is important to recognised that while a Chinese NNN Agreement may contain elements of an NDA, it is legally different – but important to obtain when entering into OEM arrangements in China and certain other Asian countries.

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