Awesome Lawsomes Legal Knowledge: NDA

/ Awesome Lawsomes Business Law

Have you checked out Awesome Lawsomes and the Corporate Cookbook yet? It’s a new graphic novel from Du Plooy Law, where we combine adventure, fantasy, and legal knowledge. Each edition of Awesome Lawsomes will feature business law concepts, so readers can learn more about the legal world in a new way.

In the first Awesome Lawsomes, we learned about NDAs from Dixie Dagger.

What is an NDA?

A Non-Disclosure Agreement (NDA) is also sometimes called a confidentiality agreement, proprietary information agreement or a secrecy agreement.

  • It creates a duty to keep certain information confidential. For example, it will allow a business to disclose information or business secrets to someone to be able to negotiate, collaborate or explore a joint venture, but makes sure that the sensitive information does not go further and get in the hands of strangers.
  • In a business environment of intellectual property and technology, this is critically important.
  • The recipient would often have to make sure its employees or contractors who may deal with the confidential information, is also bound by the agreement. In this case, our firm is bound under an NDA, but you also have to sign one.
  • It should be clear what information is confidential and what is not. It often has a laundry list of types of information that would be covered, such as financial information, marketing strategies, strategic partnerships, patents and inventions and so on.
  • It would also be clear on what information is not covered. For example, information that is already public knowledge, is not covered by the NDA so you cannot breach the agreement if you disclose that. This is important to protect the recipient of the information against an agreement that is unreasonably broad.
  • It can be unilateral or bilateral or multilateral. If we had relevant confidential information that also needed protection, the NDA would be bilateral.  This one is unilateral, protecting only their confidential information, because we really do not own trace secrets about their industry.
  • The term or duration is important. Although the NDA can be for a specific period, for example 2 years, the confidential duty can often last indefinitely, for as long as the information remains confidential or sensitive.
  • Because of the sensitive nature of the information, and the high risk of immediate damage to the discloser if there is a threatened breach, the agreement would have robust terms to get an urgent injunction from court to prevent disclosure, breach and damage.
  • There would also be terms about the information after the agreement terminates. Usually the recipient must destroy or return all of the information and destroy and delete all copies.
  • Jurisdiction is important. Different places have different laws and interpretation of an NDA and you often want to choose your own jurisdiction, not only to make sure that law applies, but also that those courts are the only ones to hear a dispute.  You do not want to be in a position to have to travel to another province or state to appear in court.


Stay tuned for another dose of adventure and legal knowledge in the next edition of Awesome Lawsomes and the Corporate Cookbook!