In the dynamic world of leasing, information is the key to success. The Non-Disclosure Agreement (NDA) has emerged as a crucial element, forming the very bedrock of modern commerce. Like a stalwart guardian, the NDA stands tall, silently but resolutely safeguarding the fruits of human ingenuity. In the leasing industry, the NDA serves as an invisible force, allowing leasing companies, clients, inventors, and visionaries to share their groundbreaking concepts with trusted collaborators and partners without fear of betrayal. As the backbone of confidentiality, the NDA paves the way for forging alliances and sharing invaluable insights, creating a vibrant and competitive marketplace where imagination knows no bounds. It is within this agreement that parties entering the leasing industry promise to protect the information they receive.
However, it is essential to clarify that the receiving party is obligated to safeguard only the information that is confidential, proprietary, not in the public domain, and specifically defined in the NDA. The NDA plays a paramount role in the leasing industry, providing a legal framework for the responsible handling of confidential information, protecting sensitive data, fostering trust, ensuring compliance with data privacy regulations, encouraging innovation, safeguarding intellectual property, maintaining competitive advantage, and facilitating secure partnerships and collaborations. It acts as a silent protector of leasing businesses.
While the NDA empowers businesses to unlock their true potential, it is not a one-size-fits-all solution. Different types of NDAs exist, categorized by the flow of information:
Unilateral NDA- When only one of the Parties to the NDA shares confidential information with another.
Mutual NDA- When both the Parties to the NDA shares confidential information with one another.
Multilateral NDA- When there are more than two parties in an agreement and all of them shares confidential information with one another.
Leasing firms enter into Mutual NDA with their clients to ensure mutual protection of sensitive information.
Key Considerations for drafting/reviewing NDAs in the Leasing Industry:
Confidential Information- clearly spells out what information is considered confidential under the NDA.
Term- Mention the duration for which the parties intend to protect the information as confidential.
Access to Information- Intent of NDA is to protect the information classified as confidential. However, it equally important to specify the individuals or entities who can have access to the confidential information under the NDA.
Purpose of NDA- Explicitly state the purpose for which the information is provided and how it should be used in line with the NDA's purpose.
Exceptions- The NDA outlines the exceptions where the parties may disclose the information viz. a. if the information is already in public domain; b. if the information is independently developed by receiving party; c. the information is provided to the receiving party by the third party who is not under an obligation to safeguard the information.
Disclosures- Besides the permitted disclosures, the receiving party if required by law can disclose the information provided a prior written information is given to the disclosing party.
Return, destruction or retention of Confidential Information- Clearly define the procedure for handling confidential information after the NDA's termination, including returning, destroying, or retaining the information as instructed by the disclosing party. It is one of the imperative clauses of NDA which safeguards the disclosing party against unwarranted use of the confidential information post termination of NDA.
Breach- Enumerate circumstances which shall be construed as breach of the Agreement.
Remedies- The NDA shall provide remedies for breach of the NDA. In general scenario, the remedies provided in the NDA are:
Injunctions: Injunctions are restraining orders that could be temporary or permanent;
Specific Performance: The disclosing party may file an application for specific performance in case of breach;
Damages: Along with abovementioned remedies, disclosing party may file a suit for damages;
Notwithstanding the aforementioned, the aggrieved party may exercise all of its remedies available under the law.
Indemnity- This is the clause wherein, one of the parties promises to pay the other party for the loss incurred by action/ inaction of the promising party. This clause safeguards one of the parties against unwarranted losses.
Governing Law and Jurisdiction - This is one of the most interesting clauses in NDAs, as each party wants jurisdiction of their own choice. It is advisable for parties to settle for a jurisdiction under which they want their disputes to be settled.
Arbitration- It’s one of the boilerplate clauses in NDA which specifies that disputes between the parties shall be settled through arbitration. This clause outlines the process for resolving disputes through arbitration, including sole arbitration or quorum, the seat or venue, applicable laws, and arbitration costs.
Non-Compete Clause- Non-Compete Clause is a clause wherein the disclosing party prevents the receiving party to engage directly or indirectly, basis the confidential information, with same or similar business of other party for a stipulated period of time.
Non-Circumvention Clause- Businesses these days have cut throat competition and every business is at risk of loss of revenue when it shares its vital information with another party. To mitigate such risk, businesses started incorporating non-circumvention clause wherein, the receiving party promises not to indulge directly or indirectly with any client, competition or competition’s client causing loss of revenue to the disclosing party in any manner.
Protection of Confidential Information- Define responsibilities and measures for securing, protecting, and ensuring the confidentiality of the confidential information the disclosing party shares.
NDA is an indispensable tool in the leasing industry. At Get It Lease, we understand that the information shared with us is the backbone of our client's business. We recognize that the NDA provides a competitive edge and acts as a catalyst for growth.
As a consumer-centric entity, we ensure that the NDA protects the interests of both our clients and ourselves. Guided by our core values, we strive to deliver impeccable services and build strong relationships with all our clients in the leasing industry.
Disclaimer:
The opinions expressed in this article belong solely to the author and do not necessarily represent those of Mons Huygens Solutions/Get It Lease or its affiliates. While the author is associated with the mentioned entities, the views expressed are personal and independent, aimed at ensuring transparency and avoiding any misrepresentation of official company positions.