What are the Consequences if I do not Respect an NDA I Signed with a Company?



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Non-disclosure agreements are often used when signing on with a company in many situations. Though these documents are used to stop the leaking of secrets or processes, they do not always stop the problem.

These signed forms provide a means to sue another that discloses secrets while working or after employment has ended at a business. If the agreement has been breached, it is important to know what may occur afterward and how to proceed. It may be best to contact a lawyer to understand how these pieces of paper affect a court case and what legal recourse or defense is available when a nondisclosure agreement is not respected.

While a lawsuit may be a possibility, these processes are messy, take time and energy and companies may only file if there is a substantial possibility of success. This means that a lawsuit may only be threatened to cause someone to remain respectful of a non-disclosure agreement. These documents demand the silence of those involved with confidential information, and any threat of legal action may ensure the compliance of signers of the agreement. Prevention of leaking secrets with these forms is reinforced when the company explains that a lawsuit may occur with the full force of a legal team backing the business. The benefits of remaining silent about the confidential information may outweigh the negatives.

Signed NDAs

When someone determines the need for a non-disclosure agreement, it is usually because there is a great deal of time, energy and money involved in keeping the information a secret from the public or competitors in business. This means any hired employees or persons involved that must become part of the secret should sign the document as an added protection of the information. If a trade is necessary, these forms may be part of the process to silence individuals before the deal is struck. Taking on the possible liability of a case is usually due to the person or company having something the other wants when signing an NDA.

Signing an NDA may be through a possible contractor, employee or service provider that has some service or product needed. To evaluate these circumstances, it may become necessary for the company with the secret to share it with the party involved which usually requires a document to be signed by any person not already knowledgeable about the information. The secret is usually given out because the entity has money to assist in bringing in business and clients. This means the added party or entity may convert to an investor. However, the investor may not be amenable to signing an NDA spouting explanations about not hearing unique ideas or products.

Leverage with NDAs

Because the company that requires an NDA has leverage, the document is usually signed. This may occur through three possible scenarios. It is possible the company has great value in the document being signed with all intention of filing a suit if it is breached for any reason. Leaking a secret or method used by the company may end in a long messy lawsuit by the business’s lawyers. Typically, the entity has some form of leverage that forces all involved to sign the NDA. This could be money, additional products or materials or other related items. Some companies require an NDA to be signed because they are inexperienced in business and the process.

Consequences of a Breached NDA

A personal lawsuit may be filed against someone that leaks confidential information from the company he or she was hired from that demanded an NDA. These are often long complicated affairs that require the assistance of a lawyer by the private citizen. Another consequence could be the immediate dismissal of the employee with an additional issue where he or she may find difficulty in finding employment in the same industry due to a bad reference. While a lawsuit may prove fruitless if the employee has no assets, the loss of work and complications in finding additional jobs may become more painful for the person.

If the company does seek legal recourse, a lawyer experienced in contractual breaches should be hired as soon as possible. Consequences of breaking these contracts could be seen on a personal level if the company posts information about it online, in a magazine or by issuing a statement to a newspaper. When a suit against the person does not occur, other messy circumstances may arise that affect the individual personally or through business. Any future prospects where a contractor NDA is necessary may lead to a loss of work.


Provided by HG.org


Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.
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