When onboarding new employees or contractors, or when sharing confidential details with potential investors, you might consider using a Non-Disclosure Agreement (NDA). Many large corporations, such as Mastercard, employ NDAs to guarantee security with their partners and clients.
“We’re only a couple of months into rolling out Ironclad for NDAs, and we have standardized and automated our templates, implemented e-signatures, and have an integrated end-to-end solution for our NDAs. It has been incredible.”
Anushree Bagrodia, Senior Managing Counsel & Legal Transformation Lead, Mastercard
Creating a legally enforceable NDA demands precise wording to define confidential information, involved parties, and the agreement’s scope. Vague or ambiguous language may render the NDA unenforceable in legal disputes. Furthermore, it’s crucial to avoid disclosing sensitive information intended to be protected by the NDA before the agreement is signed, as NDAs typically do not cover information already known before the agreement’s execution.
Currently, there is no standardized system for NDAs, which often leads organizations to create them independently. This can place a significant burden on legal teams who could be focusing on other critical tasks. Implementing a standard NDA template can alleviate this challenge. Ideally, this contract should be automated, easily accepted with a simple click, and stored electronically for future reference and updates.
The good news is that you don’t necessarily need a lawyer to create and sign an NDA. However, if the information you are protecting is vital, having a legal professional review the document is a worthwhile investment. Contract lifecycle management (CLM) software can also help, offering tools to manage NDAs at a corporate level.
CLM software provides structure and clarity to the NDA creation process, ensuring key aspects are addressed:
Staying Focused and Fair
An NDA should strictly focus on maintaining confidentiality. Adding provisions like non-solicitation or non-compete clauses can lead to resistance from the other signing party.
Maintaining Brevity
Ideally, an NDA should be concise, often fitting on a single page. Use clear, direct language that concentrates solely on the disclosure of confidential information.
Using Templates Wisely
Standardized NDA templates across the organization are useful, but each situation is unique. Always review the confidentiality agreement to ensure that the definitions, access protocols, and safeguards are relevant and appropriate for the specific context.
Understanding Key Terms
Clauses relating to severability, change-in-control, and exclusion of damage aren’t always necessary. In other cases, they may require more detailed explanation to avoid confusion.
If drafting an NDA seems overwhelming, consider using CLM software that offers legal expertise. These platforms come with digital contract management systems that manage the entire lifecycle of contracts, from storage and tracking to organization and signature collection.
Featuring workflow designers, data repositories, and collaboration tools, CLM software streamlines contract tasks, like monitoring renewal dates and obligations. This automation drastically boosts efficiency for businesses managing multiple contracts, ultimately saving time and resources. In conclusion, understanding what an NDA is and how to manage them efficiently can protect sensitive information and streamline business processes.
