Watch wording in nondisclosure pacts

Contract Language. By Steven M. Harris, AMNews contributor. July 4, 2005.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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Recently, a physician client of mine received a letter from another physician's attorney alleging that my client violated a nondisclosure agreement, often referred to as an NDA.

NDAs, also called confidential disclosure agreements, are contracts between two parties that protect confidential documents and information, including inventions and software, that the parties want to share with one another for specific purposes. Other confidential information covered by NDAs might include copyrighted materials and intellectual property. NDAs enable the parties to restrict disclosure of such information to third parties, or for general use by the recipient.

An NDA can allow both parties to have open discussion while also affording protection against disclosure of or unauthorized use of confidential information and documents. It can be signed before a business relationship is consummated, if the purpose is to protect negotiations. Or one can be signed afterward, if the purpose is to protect specifics in the relationship. Often, practices have their employees sign NDAs to restrict the use and disclosure of the practice's confidential information or property.

If you are approached to sign an NDA or are presenting an NDA to another party, you should consider including certain language in the contract to protect your rights and not unduly restrict your present and future activities. Make sure that you carefully review how confidential information is defined in the NDA.

Most NDAs will include a laundry list of the types of items which are considered confidential. The definition of confidential information will also include exclusions.