A proprietary information agreement (PIA), also known as a non-disclosure agreement (NDA), is a legal document signed between two parties that outlines the terms and conditions of sharing confidential information. This agreement is commonly used in business settings where confidential or sensitive information is involved, such as in the tech industry, where proprietary software and algorithms are developed.
The purpose of a PIA is to protect the confidential information of both parties involved in an agreement, and to prevent it from being disclosed to third parties. This agreement can be used to protect trade secrets, customer lists, financial information, and other sensitive data that could harm a business if it were to be made public.
Generally, a PIA will include the following information:
1. Definition of Confidential Information: This section of the agreement defines what information is considered “confidential.” It typically includes any information that is not publicly available and is not otherwise known or easily discoverable by the general public.
2. Obligations of the Receiving Party: This section outlines the obligations of the party receiving the confidential information. It typically includes provisions requiring the receiving party to keep the information confidential, limit access to the information, and use the information only for the intended purpose.
3. Term of the Agreement: This section outlines the length of time that the agreement will be in effect. It can be a specified period, such as two years, or it can be indefinite.
4. Consequences of Breach: This section outlines the consequences of breach of the agreement, including financial penalties or other legal action.
5. Governing Law and Jurisdiction: This section identifies the law that applies to the agreement and where any legal action must take place.
In addition to protecting sensitive information, a PIA can also provide a sense of security and trust between parties involved in a business agreement. It can help to establish a clear understanding of what information is considered confidential and how it should be handled.
In conclusion, a proprietary information agreement is a legal document that helps to protect confidential information and prevent it from being disclosed to third parties. It is commonly used in business settings where sensitive information is involved and can provide a sense of security and trust between parties involved in a business agreement. If you are entering into a business agreement where confidential information is involved, it is important to consult with a legal professional to ensure that your rights and interests are protected.