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What Happens if an NDA Is Breached?

What Happens if an NDA Is Breached?

NDAs can be a great way to prevent someone from disclosing sensitive information about your business. But what can you do if your NDA is breached?

11th June 2019

Every business wants to be the best they can be, and sometimes, they discover something unique which will further their business. However, businesses also need to ensure that this unique discovery won’t be leaked to competitors, and the best way to protect this is by enforcing an NDA. If you’re running a business, an NDA will be useful in a number of different situations. Here, we’ll talk about what you can do if your NDA is breached.

What is a Non-Disclosure Agreement?

You may have heard of a non-disclosure agreement (NDA), or a confidentiality agreement, but do you know what happens if you were to breach it? In this article, we’ll tell you what can happen if the terms of an NDA are breached.

Firstly, a non-disclosure agreement is a legally binding contract. This means that a breach can result in legal action. As NDA’s are legally binding, businesses find them particularly useful because they can protect insider and sensitive business information. Below, you’ll see some of the information that can be protected by an NDA;

  • Product designs
  • Information about clients
  • Marketing strategies
  • Manufacturing processes

What are the Elements of a Non-Disclosure Agreement?

NDAs serve to protect information which is valuable to your business. NDAs need to include the information that is protected, who cannot disclose it, and how long it’s active for. Ordinarily, NDAs are not active for a period of more than a couple of years. If your NDA is active for a long time, the Court may not enforce it. It’s important you define your confidential information correctly and ensure both parties sign it prior to the information being disclosed. This will ensure that your NDA is enforceable if the need arises for you to enforce it.

Consequences of Breaching an Non-Disclosure Agreement

An NDA is a legally binding contract meaning that it is fully enforceable if you were to be breached. Therefore, breaching an NDA comes with serious consequences and there are numerous remedies available to the other party. Some of these remedies include an injunction or damages.

However, it’s important to note that enforcing NDAs through the Courts is an expensive process, and most NDA breaches don’t reach this stage. If they do, you’ll need the expertise of a commercial lawyer to guide you through the process. If an NDA is breached, often the matter will be resolved through an out-of-Court settlement. Despite this, NDAs can act as a powerful deterrent in ensuring that sensitive information about your business isn’t revealed.

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Author
Janette Nalbandian

Janette is a Legal Tech Intern at Lawpath as part of the Content Team. She is in her third year of a Bachelor of Laws with the degree of Bachelor of Social Sciences (Major in Criminology) at Macquarie University. She is interested in Migration Law and Access to Justice.