Quick reading guide - consider these 5 things when reading a non-disclosure agreement

1. PARTIES TO THE AGREEMENT

In common parlance, companies are only referred to by their common name, such as Lidl. But when making a contract, attention should be paid to the company's real and registered name, what it is, where the address is and what the company form is. A hypothetical example would be Lidl, officially it is Lidl Suomi Ky. , with an address in Espoo. But what if the contract took it higher in the hierarchy, Lidl Stiftung & Co. KG , Neckarsulm, Germany, could become a party. The pattern would be completely different.

NDA is many times a ticket to negotiation table, but what kind of ticket you got?

2. WHAT IS CONFIDENTIAL INFORMATION?

An essential part of the agreement is how confidential information is defined. Care should be taken not to make it too broad (or narrow, depending on the case). For example, a wording like “Confidential information means all information that one party discloses to the other party orally, in writing, electronically or otherwise, and which is marked or can be understood as confidential under the circumstances” would be general but very broad. If a more limited exchange of information is desired, one could add to the wording, for example, “all information related to the purpose of the agreement…”

3. PURPOSE OF THE AGREEMENT

The key thing in an agreement is its purpose: what and why information is given and received. The more general the definition of the purpose, the more comprehensive both the confidentiality and the restriction on the use of the information related to it. The agreement usually also stipulates that the information received can only be used to fulfill the purpose.

4. DURATION OF THE AGREEMENT

How long should information given or received be kept secret? Will it still be useful and valuable in 10 years? Or will a shorter period suffice? Assessing this is key when making a contract. To find the right answer, you need to know what kind of information it is and how quickly it loses its value.

5. APPLICABLE LAW AND DISPUTE RESOLUTION

It is a good idea to agree in contracts which country's law will be followed and how disputes will be resolved if they arise. In domestic cases, Finnish law is the obvious choice, and dispute resolution can take place either in court or through arbitration. Both options have obvious advantages and disadvantages.

Of course, there are other important points, but more on that later!