In the business and commercial world, every major project or product produced for the market derives from a single idea. While it is true that all people may have come up with similar ideas, these ideas should be protected, particularly if it makes one company profitable and competent. Providing protection and clarifying the rights of those involved with that idea is addressed in intellectual property law. Business minded people in Indiana should be mindful of the different ways that allows them to protect their intellectual property rights. One of these is a nondisclosure agreement.

A nondisclosure agreement is a contract that protects secrets and important information disclosed to an individual during the course of employment, or the course of a business transaction. This contract is typically given to employees in order to prohibit them from giving out or using secret information disclosed to them by the company during their employment. Violating the nondisclosure agreement may result in legal consequences against the offending party.

Such a contract is usually used to protect the trade secrets of a company. Trade secrets are usually information that gives a company an advantage over the different competition in the marketplace. Nondisclosure agreements are beneficial to manufacturing companies because they provide protection from any information that maintains the profitability of their product over other competitors. When talking about legality, nondisclosure agreements build a confidential relationship between two parties. Both parties have the legal duty to follow the agreement and never disclose any information related to any trade secrets.

To ensure protection provided by the nondisclosure agreement, business owners should indicate the purpose of the agreement, and the obligation of each party involved. The agreement should be in writing and identify each party’s responsibilities and obligations. The contract must include all potential liabilities or consequences in the event the nondisclosure agreement is violated.

Source: Findlaw, “A Nondisclosure Agreement,” Accessed on Jan. 8, 2015