Common sense will tell you that the best way to keep a secret is to avoid sharing it. An NDA (non-disclosure agreement) works well to signal the risks associated with unauthorized disclosure. But once the information is leaked, the harm is done. An NDA is just a contract – not a magic tracker that will let you know when the other side breaches the confidentiality obligations and lets the cat out of the bag. One important requirement therefore is only to share confidential information where absolutely necessary.
If you do suspect that the confidentiality of your information has been breached, the NDA can be produced as evidence in a court so you will want to anticipate the situation where you must send an official letter. The first step is to be able to find the source of the leak. And the best way to find a person is to have as much information on that person as you can collect. The right time to collect that information is before you disclose anything of value. The details you need to collect depend on whether you are dealing with an individual or a company.
What information do I need in addition to the NDA?
If you are dealing with an individual located in the country in which you are doing business, here is what you need to include in, or attach to, the NDA: Individual first, middle, and last names; place of residence, social security number (if located in common law countries such as the U.S.); fiscal form required for the hiring of freelance workers by the laws of the country you are doing business in (In the US, the form would be a W9, in the UK you would ask for the Unique tax reference- UTR, in France you would require a statement from URSAFF).
If you are planning on exchanging information about your business with a company, here is what you need to include in, or attach to, the NDA: Company name; form of incorporation (ex: GmbH in Germany, Ltd in the UK or in India, Inc. or LLC in the US); Company address (where it is incorporated and where it is doing business. Sometimes these differ. The more addresses you have, the better chance you will have to notify that company in case of an infringement); name of the representative who will be signing the NDA and the capacity in which she is acting. (That person signing the NDA must be an authorized representative of the company. In some very sensitive cases, it’s safer to ask the person signing the NDA for the company to provide a copy of the power of attorney that authorizes that person to act for the company.); copy of the certificate of incorporation or equivalent.
Special precautions for international dealings relating to your NDA
If you are dealing with an individual located outside your country, ask for a copy of the passport to be attached to the NDA. This is because a person may have a very common name in his/her country. So to make sure you can officially notify that person, you will need to collect more information than just his/her name and address.
Some civil law countries such as France and Germany require each page of an NDA or other agreement and its attachments to be initialed. So if you are dealing with individuals or companies located in civil law countries, ask for the signatory party to initial each page of your NDA (including attachments) in addition to signing the signatory page.
All these precautions may sound like overboard legalese. And in most cases that is what they will be. But the purpose of a contract is to protect your business when things do go wrong. The more information you collect about a potential partner beforehand, the better equipped you will be to act upon an unauthorized use of your nonpublic information. This will also show the persons you are disclosing the information to that you are serious about the obligations attached to it, and that the NDA you are asking them to sign is more than a mere piece of e-paper.