CGA Law News & Blog

Are NDAs Actually That Important?

access_time Posted on: May 14th, 2019

Article by: Jeffrey L. Rehmeyer II, Esquire

There are many big-business practices that don’t necessarily apply to smaller companies. When you are a start-up or small company, you can often cut a lot of red tape without any repercussions. However, the use of non-disclosure agreements (“NDAs”), which are legal contracts of confidentiality, is not a corner to be cut.

A strong NDA for your business is simple and not that expensive. The value that you will receive to protect your company and your ideas is arguably worth the potential value of the company itself, or at least the value of many of its clients.

While it could seem awkward to ask a business partner to sign an NDA, as it seems like you are telling them that you do not trust them, you need to be the first to value your confidential information and intellectual property. If you don’t care enough to protect your intellectual property, thoughts and inventions, then how could another place value them.

An NDA doesn’t have to feel like a sign of distrust. Because start-ups and small businesses need other relationships to thrive, partnerships and strategic hires are critical. That being said, every potential partner is also potential competition. Every meeting for growth of your company could become an advantage for a competitor. And every time that you share your next big move, you need to know that you can trust the people with whom you share.

Non-Disclosure Agreements are valuable because they force that trust and make it legally binding. With an NDA in place, you can be vulnerable, open up and speak more candidly with potential partners. Rather than view the NDA as a barrier, consider it an exclusive invitation. Once you have a signed NDA, you are connected with another. It is a sign of respect, and when you have respect, you have strong partnerships and hires, which are the foundation for the growth of any business, small or large.

Using a Non-Disclosure Agreement is an investment in your business. If you don’t invest, you could be forced to watch the business fall apart, either because you are too guarded with information to ever let others in, or you share information and it is used against you. Either way, an NDA solves the problem.

For questions with regard to the Non-Disclosure and Confidentiality Agreements, as well as intellectual property and licensing issues, please contact a member of the CGA Law Firm Business and Commercial Transactions Group. They can provide you with skilled, efficient guidance to help you both grow and protect your business.