A Non-disclosure agreement in Nigeria also known as Confidentiality Agreement is a legal contract or agreement between parties with the sole purpose of legally forbidding parties from disclosing confidential information that has been shared together in the course of a commercial or employment relationship to any third party. It signifies that a confidential relationship exists between parties involved.
The non-disclosure agreement (NDA) may be used by organizations that are considering doing business together to restrict the use or disclosure of confidential information shared in the course of the business. NDA is also commonly used in an employee-employer relationship where employees need to have access to confidential information in course of their employment and the employer prepares a non-disclosure agreement to prevent the use or disclosure of the information for any other purpose.
Types of non-disclosure agreement
A non-disclosure agreement can be either a Unilateral Agreement or a Mutual Agreement, which is dependent on which party is providing the secret information.
A unilateral Non-disclosure agreement is a one-way agreement where only one party in the business relationship will be provided with the information to be protected. It is designed to stipulate the duties and obligations of one party to the agreement. This is usually used in an employee-employer relationship.
A mutual Non-disclosure agreement is a type of agreement where the information provided will be shared between the parties. The agreement will clearly set out the confidential information that parties wish to share between them and restrict their use and access to third parties.
Relevance of Non-disclosure agreement
Clauses in a Non-disclosure agreement
It is important to note some important clauses that must be present in a non-disclosure agreement and its importance in a commercial transaction.
A non-disclosure agreement is as binding as a contractual agreement and it gives assurance that where there is a breach of the agreement by one party, the other party can seek redress for damages resulting from the disclosed information.
There are other reliefs available to an aggrieved party where there is a breach of the confidentiality agreement such as Account for profit, where the defaulting party is to account for profit made from the breach and Injunctive relief.
Finally, it noteworthy that an NDA imposes an obligation on parties to it, and confidential agreement can be included in the main contractual agreement or as a stand-alone agreement.
By Corporate & Commercial Law Department at Resolution Law Firm
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