FAQ 8. How do I keep my business information confidential?

That is a surprisingly big question with several answers. Perhaps the method many people think of first is executing a non-disclosure agreement (also known as, an NDA or confidentiality agreement). NDAs are used in business all of the time between parties considering doing business or later carrying out that work to protect information one of more of the parties considers secret or valuable.

The pros of using a well-drafted NDA are that it is a simple way to state upfront what kind of thing is considered proprietary or secret, how the confidential information will be handled by the recipient, and even how long the secret must be kept and what happens to the information at the end of the relationship. The cons mainly center around the cost of enforcing the terms if the other party breaches and the fact that despite best efforts, the information may now be accessible by any number of unintended recipients, including competitors of the disclosing party.

Therefore, regardless of the agreement or its terms, it is still really important to know who it is that will be receiving the information and what is their reputation for respecting their agreements.

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