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I N S I D E T H I S I S S U E : E n t r e p r e n e u r i s m / M a n a g e m e n t To o l k i t / Ec o n o m y Ce n t ra l b y Fa l c o n B a n k ENTREPRENEURISM

Keeping Confidences When it comes to Non-Disclosure Agreements, language matters. By Chad Stahl

information relevant to existing business practices. ________ c A need to provide employees with access to the company’s confidential or proprietary information, either as part of specific job functions or in connection with a promotion.

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Non-Disclosure Agreement is, at its core, a promise among parties to freely exchange certain confidential information with each other. Non-Disclosure Agreements can be crafted in a variety of ways depending on the parties’ needs and the interests sought to be protected. There are a number of situations where a Non-Disclosure Agreement might be appropriate. It most commonly arises in instances where there is a desire to relay something valuable about a business (or prospective business) accompanied by a need

for assurance that this valuable information will not be stolen or used without knowledge and approval. Typical scenarios include: a A desire to present a business idea with a prospective buyer or partner to discuss a new product, service, or technology that might need to be researched, developed, or implemented. ________ b A need to receive services from a vendor or company, but in doing so it requires providing access to sensitive

Depending on the specific circumstances for its use, key terms should be used when drafting a Non-Disclosure Agreement: Identification of the Parties. This seems straightforward, but where parties often go astray is in a failure to anticipate whether one or both parties might need to coordinate with a related or affiliated company or agent. If so, the agreement should have a provision that covers that situation. Mutual v. Non-mutual. Are both sides bound by the agreement or just one? The parties should discuss if this is a onesided agreement whereby only

Contributor ________ Chad Stahl, an attorney at Quinlivan & Hughes, advises organizations on a variety of workplace and employment law matters. The information presented here is for educational purposes only. It is not offered as, and does not constitute, legal advice or legal opinions. Readers should seek legal counsel for specific questions.

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one party is providing confidential information, or is this a situation where there will be an exchange of each party’s confidential information. Term of the Agreement. While it is possible for an agreement to last forever, the more practical reality is that the parties will want some certainty as to when the agreement ends in the context of the business or industry, and the information being exchanged. For example, a piece of technology that is state of the art today, may be independently discovered or commonly known within a few months or years making it no longer confidential. In such a case, a shorter time period might be reasonable. Definition of Protected Information. Clearly understanding and defining exactly what information is subject to protection is vital. Generally, the disclosing party wants to define protected information as broadly as possible. In contrast, the receiving party may want to significantly narrow the definition so as not to make an inadvertent disclosure. Protection may also extend to not only the specific information shared, but to the

Profile for St. Cloud Area Chamber of Commerce

March/April 2021  

St. Cloud Area Chamber of Commerce Business Central Magazine

March/April 2021  

St. Cloud Area Chamber of Commerce Business Central Magazine