Pocket Finance by Omilola Oshikoya- Non Disclosure Agreement

 How to protect your business idea by guest writer.


Our guest writer is Oluwatosin Famakinwa a legal practitioner in one of the top law firms in Nigeria. Tosin also hosts a blog www.lawataclick.wordpress.com.  She has written an articke on protecting your business interests through a Non-Disclosure Agreement.

Janet was invited by ABC Limited to present a business proposal before its board. She was so excited that she amended her presentation to include everything about her business plans including confidential information about her business. Little did she know that she had been invited without any intention of approving her proposal as ABC Limited had reached the limit of its budget for the year.

 

An excited Janet finished her presentation and answered all questions with the confidence of an achiever only to be turned down at the end with the lame excuse that the company had just awarded the contract to an earlier presenter.

A week later, Janet was driving past the shopping mall only to see a bill board with a slogan from her presentation “Dare to Dream” sponsored by ABC Limited.

 

A lot of people have found themselves in similar situations toJanet’s, giving out quality confidential information to potential clients or business partners without any protection against the use of such information or ideas. Had Janet known better, she would have placed a caveat on her presentation or signed an NDA however short with ABC Limited before going ahead to divulge her ideas.

What is an NDA?

 

This a is a non-disclosure or confidentiality agreement entered into between two parties by which either or both parties have agreed to keep certain matters which could be of commercialvalue, of national security or even personal information secret. The main essence of having an NDA is to ensure that material information known to one party is not divulged or spread to third parties without the consent of the possessor or originator of the information.

 

There are different instances where an NDA is necessary such as between solicitor and client, two potential business partners, employer and employee, lender and borrower in a financial transaction amongst others. 

 

The law governing the protection of confidential information arises from an equitable principle in addition to contract which provides that where information, which is of a secret or confidential nature is given by one person (the “donor”) to another (the “recipient”), and the recipient is either expressly told by the donor, or ought reasonably to understand from the circumstances surrounding the communication, that the donor wishes the recipient to keep the information confidential, then equity acts on the conscience of the recipient to prevent him from making an unauthorized use or disclosure of the information.

 

Form of an NDA

 

An NDA need not be voluminous. A single page summarizing what constitutes confidential information and obtaining a promise or obligation on the part of the recipient not to disclose the information without the consent of the owner of the information would suffice.

A standard NDA would probably contain one or more of the following clauses:

• Definition of confidential information;

• Period of disclosure;

• Permissible disclosure;

• Return of confidential information;

• Termination; and

• Governing law.

 

Information excluded from confidentiality

 

Not all information or facts can be the subject of confidentiality. For instance any information which is readily available to the public cannot be said to have been received in breach of confidentiality. Hence there is a need to test whether such information is capable of public knowledge such information in the media (audio or print). Other information excluded from the realm of confidentiality includes:

• Information not known to the general public but which is known to the receiving party before the execution of the NDA; or

• Information provided to the receiving party by a third party not under an obligation of confidence benefiting the disclosing party; or

• Information independently developed by the receiving party without use of the disclosing party's confidential information; or

• Information which are required to be disclosed to the public by virtue of a law or public policy.

 

Omilola Oshikoya is Africa's premier life, finance and business coach,co-author of the money book,a blogger(pocket finance), a columnist for the second most widely read newspaper in Nigeria and a co-host on the talk show, The heart of the matter, which airs on Ebonylife and Niger Delta TV.