NDA Contract, How important is it?


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Non-Disclosure Agreement is.

A Non-Disclosure Agreement (NDA) is a legal document between two or more parties that agree not to disclose any sensitive information shared between them during their business relationship.

Similar to privacy agreements that protect the confidentiality between a doctor and a patient or between a lawyer and a client, an NDA provides crucial protection for business owners who share confidential information with partners, investors, employees, or future contractors.

The importance of a Non-Disclosure Agreement

Legal agreements such as Non-Disclosure Agreements (NDAs) are crucial for small businesses and startups, both within and outside the tech industry. If you have a great idea or have developed new technology, products, or proprietary formulas that you want to sell, you may need to share this information with others to secure funding, start production, and bring your product to market.

Your business plan and important customer lists may also require protection. By using an NDA, you establish a legal agreement that can help safeguard your customer base and ideas while you raise funds and hire employees or freelancers.

An NDA helps ensure that a company’s critical information does not leak to outsiders. This includes drug formulas, software development processes, source code, and business models.

By establishing an NDA, it can prevent malicious parties from disclosing or misusing important secrets.

If a party breaches the NDA, they must compensate for damages as stipulated in the agreement, and they may also face legal consequences.

Especially if the breach involves disclosing secrets that violate patents or intellectual property rights, the following

Criminal Code, Section 2: Offenses of Disclosure of Secrets, Sections 322-325:

This includes penalties of up to six months’ imprisonment or a fine not exceeding ten thousand baht, or both.

Trade Secrets Act B.E. 2545 (2002):

This act defines the term “trade secret.” If the confidential information falls under this definition, it is protected by this law as well.

Example Non-Disclosure Agreement

5 common types of NDA

Both Parties
The NDA form is a mutual contract binding both parties, agreeing to keep the information confidential.

One of the parties
This agreement covers situations where only one party (the discloser) shares confidential information with another or several parties (the recipients). The recipients are legally obligated to maintain the confidentiality of the information.

The multi-party NDA covers situations where three or more parties share jointly owned intellectual property information. One or more parties may disclose sensitive information, and all recipients are bound by the agreement to protect that information. This type of NDA is more effective when multiple parties are involved compared to creating separate agreements for each party.

The termination date
This type of agreement is an NDA that has an expiration date. When the agreed-upon period ends, the disclosing party may release the receiving party from the agreement. The agreement may specify an explicit end date or terminate when the business relationship concludes.

Never ending
This non-disclosure agreement (NDA) is perpetual, and the receiving party must keep the information confidential for as long as both parties are working together or until the information becomes publicly known.

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