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How to Protect Independent Contractor Nondisclosure Agreement

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When hiring an independent contractor, it may be necessary to have them sign a non-disclosure agreement (NDA), as they may gain access to confidential trade secrets. There are two main types of NDAs: unilateral, where only one party shares information, and mutual, where both parties share and seek to protect their information. The purpose of an NDA is to prevent unauthorized disclosure of confidential information. Important considerations for NDAs include limiting the information to what is genuinely confidential and essential to protect.

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Are NDAs enforceable in Canada?

Are Non-Disclosure Agreements Enforceable? Canadian courts have established certain guidelines to determine whether a restrictive covenant in an employment situation, such as a non-disclosure agreement or a non-compete clause in an employment contract, is enforceable.

What is a non-disclosure agreement between company and contractor?

A non-disclosure agreement is a contract whereby two parties signing it agree not to disclose any confidential information outside of work. Non-disclosure agreements are generally made to protect business confidential.

What makes an NDA unenforceable?

There are several reasons why an NDA might be unenforceable, however. If the NDA is too broad, the information under the NDA is not actually confidential, or if the agreement requires the employee to do something illegal. NDAs must be carefully crafted for proper enforcement.

What is not protected by an NDA?

Data in electronic form (how most personal information is stored) is poorly protected by an NDA because it usually contains large information. A data security clause must be included in the NDA as it is difficult to identify some of the data as confidential in this case.

When should you not use an NDA?

The red flag of misuse is when you ask for an NDA for a pitch meeting, a meet and greet, or a job interview. If your idea can be stolen after meeting someone for an hour for the first time, causing you irreparable harm in market, its probably not a very good idea, or youre a terrible business person.

What are exceptions in an NDA?

Some of the exception clauses are: Information that is in the public domain. Information that the disclosing party disclosed before signing the agreement. Information received by the receiving party from a third party, wherein the third party was not obliged to keep the information confidential.

What does an NDA not cover?

Public records, including SEC filings or company addresses, are not covered by these confidentiality agreements. The courts can also interpret the scope of an NDA in ways that one or more participants may not have initially expected.

Can you protect an idea with an NDA?

An NDA creates the legal framework to protect ideas and information from being stolen or shared with competitors or third parties.

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