A non-disclosure agreement (NDA) is a contract in which one or more parties agree not to disclose certain confidential information.
The purpose of an NDA is to protect the confidentiality of proprietary information.
NDAs are commonly used in business relationships where trade secrets or other sensitive information may be exchanged.
In Colorado, NDAs are generally enforceable if they are properly drafted and meet all the requirements of a valid contract. To be enforceable a Nondisclosure Agreement:
- Should be in writing – An NDA should be reduced to writing and signed by all parties to the agreement. Verbal agreements are difficult to enforce and cannot be enforced beyond one year.
- Must be supported by consideration – All contracts must be supported by consideration, which means that each party must receive something of value in exchange for their promise not to disclose confidential information.
- Must specify the parties who are bound – NDAs can be either one-way or mutually binding. A one-way NDA only requires that one party is bound to not disclose information. A mutually binding NDA requires that both parties are bound to not disclose information.
- Must be sufficiently specific – An NDA must be clear and concise regarding what information is confidential and how it should be protected. Ambiguous or overly broad NDAs are more likely to be challenged in court.
- If an NDA does not meet all of these requirements, it may still be enforceable if the parties can prove that there was an implied contract based on the circumstances.
For example, suppose an employer requires an employee to sign an NDA as a condition of employment. In that case, the NDA may be enforceable even if it does not meet all of the above-mentioned requirements.
Consult with a Business Lawyer Colorado Residents Trusts
Contact Baker Law Group before you enter into a non-disclosure agreement in Colorado. Baker Law Group is a Colorado business law firm with many seasoned Non-Disclosure agreement attorneys in Colorado who can protect your rights.