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HomeBusiness contractsNon-disclosure agreement (NDA)

Learn more about Non-disclosure agreement (NDA) in Malaysia

A non-disclosure agreement (NDA) is essential to protect a company’s confidential information. It prevents people from disclosing private information. It is essential to have a non-disclosure agreement signed with your partners, suppliers or service providers when they deal with you. Themis Partner’s Non-Disclosure Agreement form helps you to effectively protect your organisation against the disclosure of information or data to third parties without your consent. You can also download our Employee Confidentiality Agreement which is specifically designed to protect you against disclosure by your employees.

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What is a Non-Disclosure Agreement (NDA)?

A Non-Disclosure Agreement is frequently used in business to maintain the confidentiality of private information supplied to another party or communicated during the course of business. Non-Disclosure Agreements are frequently referred to as “Confidentiality Agreements” or simply “NDAs.” A secrecy agreement is occasionally a confidentiality clause inserted in another contract, such as an employment contract or a service agreement.

What is the role of a Non-Disclosure Agreement?

A Non-Disclosure Agreement serves two functions: secrecy and protection. A confidentiality agreement might safeguard information ranging from product specifications to client rosters. A NDA establishes the legal basis for preventing ideas and information from being stolen or disclosed to rivals or third parties. An NDA serves three fundamental purposes:

Identifying protected information: NDAs categorize information by creating a line between what is secret and what can be revealed. This permits the parties to work freely within the confines of the confidentiality agreement.
Safeguarding sensitive data: Signing an NDA establishes a legal commitment to keep sensitive material private. Any disclosure of the information is a breach of contract.
Protecting patent rights: Because public revelation of a pending innovation can often terminate patent rights, an NDA can shield an inventor as they develop their new product or concept.

What is included in the NDA?

The NDA has numerous common components, including the following:

➤ Parties to the Agreement, a detailed description of the parties. Except under a bilateral or reciprocal Non-Disclosure Agreement, the parties shall be referred to as "the disclosing party" and "the receiving party."
➤ Definition of "Confidential Information"
➤ Private Information Obligations, describing explicitly the information that is anticipated to be kept confidential; how long it should be kept confidential; and when and how such information can be utilized by the other party.
➤ The agreement's effective date and length.
➤ How the data will be returned or deleted upon termination.

What are the different types of Non-Disclosure Agreement?

Non-Disclosure Agreements can be unilateral or bilateral:

A Unilateral agreement: is a one-sided agreement in which only one party gives sensitive information and the other party is required to keep it secret and not disclose it to others.
A Bilateral agreement: requires both parties to share secret information in order to preserve and secure the information from other parties.

When to use a Non-Disclosure Agreement?

The following are some examples of when you would wish to employ a Non-Disclosure Agreement:

➤ When employing the services of another company or a person when such firm or individual will be given access to sensitive or private information of your organization
➤ When workers are given access to the company's confidential information while on the job
➤ While pitching a business proposal to a venture capitalist, possible partner, or investor
➤ While sharing financial, legal, and other company facts with a potential acquirer of your firm

What is "Confidential Information" in Malaysia?

There is no standard definition or list of what constitutes confidential information. The party sharing the secret information would generally prefer to define confidential information as broadly as possible to guarantee that the other party does not abuse the information. For example, “Confidential Information” refers to any information and documents pertaining to the business of the disclosing firm and can occasionally be considered to include any spoken information provided. The receiving party, on the other hand, would like private information to be defined as material that is identified in writing as “confidential.”

What happens in case of breach?

Breach of confidentiality duties may result in irreparable harm, injury, loss, and damage to the Disclosing Party, the degree of which may be hard to measure and which cannot be entirely compensated by monetary damages.

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