Page 40 - Retail Pharmacy Magazine October 2020

38 BUSINESS THROUGH INNOVATION LEGAL NWON-DISCLOSURE AGREEMENTS: ARE THEY RIGHT FOR YOU? hen operating a business such as a pharmacy, it’s important to consider the protection of your private information. One way of doing this is through the use of a non-disclosure agreement (NDA). Private information can come in many forms, and may include details about your pharmacy’s finances, clients or ideas for a new marketing campaign. Putting strong protections in place to guard this information will allow you to remain competitive and differentiated from your competitors. It’s inevitable that at some point in the operation of your business, you’ll encounter situations in which these ideas and details will need to be shared with others. Such situations include when: they’re protected. This can result in higher levels of cooperation and productivity for both parties. Cost effectiveness NDAs are generally simple documents that don’t involve large costs for the parties involved. This can make them particularly attractive for business owners. Signalling Much of the value in an NDA comes not only from the legal implications of the document, but also from what it says to the other party. By asking another party to sign an NDA, you’re telling them you’re serious about protecting your sensitive information, and that you need them to also take appropriate measures to protect that information. Precautions While NDAs can often be a good idea for pharmacy businesses, a few precautions should be kept in mind. Timing If you intend to implement an NDA, it’s important that you have all parties sign an NDA at the beginning before you disclose any information that you wish to protect. If you fail to do this, not only will any shared information not be protected, but also, once your relationship has begun with the other party, it may be harder to negotiate the terms of an NDA. Clarity When preparing an NDA, you must ensure the contract isn’t too vague or broad, as it may be unenforceable if it is. Many NDAs struggle to pinpoint the information that is protected under the terms of the agreement. This can severely diminish the legal protections offered by the NDA, as any ambiguity will require a higher level of interpretation by the court in the event that a dispute is litigated. False security It’s important to remember that NDAs are not foolproof and can create a false sense of security. Although there may be very real consequences for parties that choose to breach an NDA, this doesn’t mean that parties don’t breach these agreements regardless. There could be numerous factors that influence an individual’s decision on whether to breach an NDA. On weighing these factors, they may feel that they would still benefit from sharing private information, regardless of the NDA and any associated penalties. However, it’s important to note that this doesn’t negate the protections offered by an NDA should you choose to sue the other party for breach. Wrap-up While NDAs aren’t perfect solutions for all businesses, they can be a powerful tool when protecting your personal information. If you have some questions about this article, or would like some help putting an NDA together, please contact the team at Clinch Long Woodbridge Lawyers. • • • • • Dealing with prospective business partners. Entering licensing arrangements. Dealing with prospective franchisees or franchisors. Engaging sub-contractors. Hiring new employees. If you’re facing any of the above situations, it may be worth considering an NDA. What is a non-disclosure agreement? An NDA is a contract made between parties that identifies what forms of information will be shared between the parties and sets out rules for how that information can be handled. Generally, when asking another party to sign an NDA, you’re asking them not to share any private information that you’ve shared with them. Is an NDA right for you? When considering this question, there are many benefits you should consider. Legal protection As NDAs are written contracts, it’s easier to prove a breach of contract in the event of a dispute. Essentially, if a party were to inappropriately disclose your business’s confidential information against the terms of the NDA, an NDA would give you the right to sue that party for any losses you suffered. Information sharing Once an NDA is in place, parties will generally feel more comfortable sharing information with each other, as they know By Peter Clinch. Principal, Clinch Long Woodbridge Lawyers Peter Clinch is Principal at Clinch Long Woodbridge Lawyers, a Sydney-based law firm with a focus on pharmacy. Peter assisted many pharmacists with a broad range of issues affecting their businesses. Inquiries: pclinch@clw.com.au or 02 92794888. RETAIL PHARMACY • OCT 2020