Non-Disclosure Agreements (NDAs): How and when to use them in your company

What is a non-disclosure agreement?

Non-disclosure agreements are a key tool for protecting highly sensitive information of any company, regardless of its activity or size. NDAs are contracts which, like any other contract, bind the signing parties, and any breach or violation may entail serious consequences, whether the information is shared orally, graphically, or in writing.

NDAs can be signed in the context of business relationships between companies, investment processes, with employees, workers, etc.

When is it advisable to sign a non-disclosure agreement?

As mentioned, any situation where confidential information is to be disclosed is a good time to sign a non-disclosure agreement. In other words, whenever you want to protect certain information, it is advisable to sign this type of contract.

Thus, NDAs are especially useful in:

• Business negotiations between companies (for example, when evaluating the provision of a service or negotiating an investment).
• Joint venture contexts, where strategic or commercial information is exchanged.
• Employment contexts, when employees have access to sensitive information (financial data, customer data, internal processes, strategies, etc.).

Ultimately, signing a non-disclosure agreement is advisable whenever personal, technical, industrial, or strategic information that may be valuable to the company is to be shared.

What should a non-disclosure agreement include?

The content may vary depending on the type of information to be protected and the context. Still, most agreements cover the following key aspects:

• Subject matter: Clearly define what information is considered confidential (technical, financial, commercial, strategic, etc.).
• Purpose: Indicate the purpose for which the information is being disclosed.
• Obligations of the parties: It may be unilateral or bilateral. It should establish permitted uses, whether it can be shared with third parties, and applicable security measures.
• Duration: Usually between 3 to 5 years. Some information may remain confidential indefinitely.
• Breach: Legal consequences for unauthorized disclosure or misuse.
• Return or destruction of information: Upon termination of the relationship or when the information is no longer needed.

When does it not make sense to sign a non-disclosure agreement?

It is not always necessary or useful to sign an NDA. Some examples where it does not make sense:

• When the information is public domain at the time it is shared.
• If the receiving party already knew the information without being subject to any confidentiality obligation.
• When the information is neither sensitive nor strategic, and its disclosure poses no harm.

Before signing an NDA, it is advisable to assess whether the information truly requires protection.

Conclusion

Non-disclosure agreements are an essential legal tool to protect a company’s most valuable assets: its information.

In business negotiations, employment relationships, investment processes, or strategic collaborations, NDAs help define clearly what information is confidential, how it should be handled, and what consequences may arise from its misuse.

However, they should not be signed automatically. Evaluating their necessity and tailoring them to the specific context is key to ensuring they truly serve their purpose. And that’s where we can help at Metricson. If you need assistance with your non-disclosure agreements, you can contact us by clicking here.