Nevada residents who use a non-disclosure agreement, or an NDA, may be using the legal document for their business dealings in the wrong way. There should be careful consideration given to whether an NDA is necessary, and if it is, whether the NDA that is needed should be a two-way NDA.

As a legal agreement, an NDA requires that the parties involved adhere to their obligations as specified in the agreement. While NDAs generally do not have disclaimers regarding consequential damage, breaches of confidentiality are addressed in the consequential damage disclaimers that are a part of the operative document to which the parties may agree. As a result, any party that is in breach of an NDA may be financially liable for damages.

When two commercial entities broach the subject of an NDA, they should determine if either party will be unveiling confidential data and if it is necessary to do so. If confidential information has to be disclosed, an NDA can be used to protect that information. However, to provide the most security for the confidential information, it would be wise not to disclose it any manner if the transactions between two commercial entities does not require it.

If the disclosure of confidential information is unavoidable, it will then be necessary to determine exactly how much information should be divulged. The party that receives the confidential information will be responsible for protecting that information according to the NDA’s terms.

An attorney who practices business formation and planning law may review non-disclosure agreements on behalf of clients involved in joint commercial ventures. The attorney may explain exactly what information is protected under the agreement and the possible consequences of breaching the terms of the agreement. If necessary, the attorney may pursue financial damages against any parties in breach of an NDA.