A non-disclosure agreement prevents parties who are working on a particular thing from discussing any internal details, ideas, events, etc. with any external third party. When it comes to financial information, this is typically an agreement between the releaser and receptor of said information in order to make sure that it stays between them. In the case of a breach, the receptor is typically entitled to some sort of injunction and may even be able to claim damages. For these reasons, financial information NDA is common practice in the field of finance.
Drafting a financial information NDA
Even though it does have a few more legal mechanisms when compared to other NDAs, drafting a financial information NDA is still not overly complex. We are offering a few templates that cover the ins and outs of a financial NDA. Evidently, it has a few more clauses than NDAs in other fields and is an excellent resource on to base your very own agreement on.
When is a financial information NDA needed?
In the world of high-finance and business, information is an extremely valuable asset. In many cases, parties trade information which they would want to keep confidential and under wraps. The financial information NDA is a legal mechanism by which they can do exactly that. Upon signature, the NDA prevents both parties from disclosing said information to any external third party. This makes financial information NDA fairly common in the financial sector.
How is financial information NDA different from other NDAs?
A financial information NDA has some clauses and stipulations that make it somewhat unique. As it covers, primarily, the topic of business, it holds a ton of clauses, such as exclusivity and indemnity clauses. Additionally, since it deals with the trade of information, it is rarely ever embedded into a contract and is almost always issued as a separate document. Finally, financial information NDAs tend to have very definite and well-defined sections when it comes to breach of contract, unlike other NDAs. Typically, this includes things like injunctive relief, damages, payments, etc. and in some cases, when particularly prized information is at stake, even criminal charges. As a result, it is a particularly powerful NDA.
Whenever there are multiple parties working on something, an NDA may be used to bind all of them from disclosing any internal details to any external parties. As a result, an NDA may be used when that is desirable – In business sales, an NDA commonly precedes closing the deal.
An NDA should clearly define what is considered confidential, the names of both parties involved, additional clauses, such as exclusivity and indemnity clauses, legal obligations of both parties, and in the case of a financial information NDA, a clear course of action in case of a breach.
Yes and no – in some cases, an NDA may include a clause that prevents disclosure of its very existence. When such a clause exists, it is considered a breach when informing third parties of the NDA. If there is no such clause, the NDA may be openly addressed.