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Glossary – NDA (Non-Disclosure Agreement)

NDA (Non-Disclosure Agreement)

Nikiforov Alexander
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What is an NDA?

An NDA (Non-Disclosure Agreement) is a legal document that protects confidential information. It obligates the person or organization that has access to important information not to disclose it to third parties. In the business world, such agreements often accompany civil contracts or serve as appendices to cooperation agreements.

The NDA text specifies certain aspects, such as what is considered confidential information, the duration of the agreement, the responsibilities of the parties, as well as the conditions and procedures for information exchange. Confidential data may include financial indicators, sales volumes, and employee salaries.

Although Russian legislation does not have a clear definition of NDA, the Civil Code does not prohibit the conclusion of such agreements if they do not contradict the laws of the Russian Federation. In case of a breach of the agreement, the court typically recognizes it as valid and supports the injured party.

Why is an NDA needed?

Most often, the initiator of the NDA is the company transferring important information to another party. Such agreements are signed when concluding deals or contracts, including cooperation with individual entrepreneurs and freelancers. Employers may also require employees to sign an NDA if they have access to critically important information.

In the field of marketing, NDAs are used to protect against data leaks regarding market research, advertising campaigns, and unique content. An NDA serves three key functions:

  • Protection of confidential information: An NDA ensures the safety of information that could harm the business.
  • Protection of intellectual property: This agreement helps protect new developments and ideas from unfair use.
  • Definition of protected information: The agreement clearly specifies what is considered confidential, which helps avoid misunderstandings.

Types of NDA

There are various types of NDAs, depending on the number of parties involved in the transaction:

  • Unilateral NDA: Signed by only one party, most often an employee or freelancer.
  • Mutual NDA: Both parties are obligated to maintain confidentiality. This is most commonly used during negotiations about mergers or joint projects.
  • Multilateral NDA: Concluded between several parties that exchange secret information, such as within collaborative research.

How to draft an NDA?

The law does not prescribe a strict structure for NDAs, so companies have the opportunity to include the necessary points in the document. Typically, an NDA includes the following elements:

  • Document header: Information about the parties and the date of the agreement.
  • Definition of confidential information: Indication of what information is considered such.
  • Restrictions on use and obligations of the parties: The purposes of using the information and the procedure for its processing.
  • Liability of the parties: Consequences for breaching the terms of the NDA.
  • Duration: Definition of the time period during which the agreement remains in force.
  • Dispute resolution: Methods for resolving potential conflicts.
  • Details of the parties: Information about the companies or individuals signing the agreement.

What information is not covered by an NDA?

There is a category of information that is not considered confidential:

  • Publicly available information, such as company addresses.
  • Information obtained from third parties not related to the NDA.
  • Data that must be disclosed by law, such as in the context of an investigation.

It is also possible to specify in the NDA what information will not be considered confidential to avoid misunderstandings.

What to do in case of a violation of an NDA?

If there is suspicion of an NDA violation, it is necessary to gather evidence first: letters, video recordings, witness testimonies. Depending on the damage, the injured party may attempt to negotiate with the violator or go directly to court.

If the violator is an employee, they may face disciplinary or financial liability. If another company is the violator, it may be subject to civil liability. In cases of serious violations, criminal liability may also apply.