Business-to-business contracts are among the most important agreements that organizations negotiate. Their contracts may play a key role in the company’s operations and financial solvency. Other companies provide supplies and services that can help an organization thrive.
Often, the focus when negotiating a business-to-business contract is on clarifying expectations and sometimes imposing specific consequences if one party does not meet its obligations to the other. Those negotiating on behalf of an organization could easily overlook the potential benefits of including a non-disclosure agreement in a business-to-business contract.
People tend to think of restrictive covenants, like non-disclosure and non-compete agreements, as tools for employment contracts. However, they can also serve a very important purpose in contracts between companies.
Companies must think of their trade secrets
Trade secrets are often what give a company its competitive edge. Employees are not the only potential threat to those secrets. Any time one company does business with another, there likely will be some disclosure of proprietary information.
For example, a vendor supplying a restaurant or factory might quickly come to understand the components that make up a secret recipe. An organization providing remote information technology support could easily gain access to a company’s client lists.
Preserving both parties’ privacy
Non-disclosure agreements integrated into business-to-business contracts can help preserve the privacy of both organizations involved. From preventing the disclosure of the terms of the contract to keeping operational details a secret, non-disclosure agreements can serve multiple valuable purposes.
The creation of custom contracts that include protective terms is a good investment for any business. Getting legal guidance to review the goals of a contract can help establish what terms and provisions should be included.
