The Need to Know of Non-Disclosure Agreements

In business, every deal is a mixture of opportunity and risk. The focus for Creatives, or any party embarking on a business transaction, is to reduce risk and maximize opportunity while hopefully avoiding litigation. Unlike the legal situations we often are exposed to in the “zero-sum” world of courts, a successful business relationship does not have one party being declared a winner or loser. Good business creates an opportunity for future collaborations. 

 For any party, especially a creative professional, your ideas, brand, and potential deliverables are key to your progression and wealth. Non-Disclosure Agreements (NDAs) can be a strong tool for monetizing and protecting your business and intellectual property. A Non-Disclosure Agreement creates confidentiality parameters that either one or both parties to the agreement must adhere to prior to the exchange of ideas and information. An NDA can create a sense of comfort and ease for you and the other party. By ensuring that you are meeting on an even playing field, concerns surrounding usurpation of your concept, process, or product subside, and you are more likely to hear what each party has to offer and hopes to gain. 

 There are two main levels of confidentiality that you should think about when having an NDA drafted. One focuses on the confidentiality around the information that is brought up during the meeting, such as the ideas, concepts, and materials shared during that time. By protecting the information shared all parties can discuss a concept clearly and honestly. This also gives you a point of origin should you later discover that some information shared that day does end up with an unauthorized third party. The other level focuses on confidentiality around the meeting itself. Many creative industries rely heavily on relationships. In industries such as art, fashion, and music, who you are aligned with matters and could determine distribution options, funding, and other tangible and intangible support. Members of these creative areas can experience varying degrees of public and private responses at even the slightest suggestion of a meeting. Many desire to keep the involvement of the parties confidential until an actual agreement is met, especially if the meeting is only at a preliminary level. You can choose an NDA that is tailored to one of these levels or both. They can cover information that is written or oral, marked, or unmarked. An NDA can also include mutual language. In a day where so many creatives are collaborating with their friends or those they feel comfortable with, contract language can encourage both parties to share by protecting what they are individually bringing to the table.  

 Non-Disclosure Agreements can also create a structure for an emerging or evolving Creative. Getting into a habit of providing a non-disclosure agreement can trigger your mind and encourage the thought that if you are considering providing an NDA then a scheduled meeting, even if informal in structure, should occur. Providing the NDA in advance can also force you to fully flush out your idea to the best of your ability and consider the information necessary for that meeting so you do not share more than is necessary. An NDA can also keep you on track when meeting with a party that may be more established or larger than you. Many times, creatives are so enamored with the opportunity to work with a more established or financially stable party they are lulled into a false sense of security that could end with providing the larger party more access to information than desired on the opportunity at hand or sharing ideas not originally focused on. Use your NDA to keep all parties on a “need-to-know” basis.

 It is important to keep in mind that traditional Non-Disclosure Agreements only cover the preliminary meeting or series of meetings defined. Non-Disclosures are the first step in a process leading up to a fully executed contract. Beware of NDAs that attempt to place terms governing future duties, especially if the meeting is merely to consider establishing a working relationship. If the option to walk away is still on the table, you should not be binding yourself to long term obligations that would remain even if no agreement was reached. Traditional NDAs do not address pay, deliverables, or other important terms that will govern the crux of the final arrangement. You can however bring the confidentiality terms of your NDA over into your newly drafted final agreement. Non-Disclosure Agreements are for the short term; they allow the parties to come together. Depending on the length of time of the relationship, or the level of consistency that parties are creating and receiving new ideas or content, your final professional services agreement, licensing agreement, or any fully executed contract will most likely place a confidentiality clause that fits your business relationship and can evolve with time. The point is to not have the NDA be the only contract ever signed when entering into a new business. 

 Non-Disclosure Agreements, like all contracts, are living breathing documents. You should tailor each NDA to that specific engagement, even if you have standard language. Boilerplate NDAs may cause you to commit to terms you did not intend to with various parties. It is always wise to consult an attorney or your general counsel when drafting contract language. They can provide input on concepts and wording for your Non-Disclosure Agreement based upon the nature of the projected relationship.

 The Law Office of Jameelah H. Tucker, PLLC provides contract drafting services such as these and more. We understand what is necessary in a corporate setting to create and grow your business and arm you with the confidence necessary for future partnerships.