Agreements

NDAs and confidentiality agreements, in practical terms.

Before a buyer sees your accounts, before an investor opens your model, or before a supplier gets your specifications, someone will usually ask for an NDA. Sometimes the document is called a confidentiality agreement instead, or a confidentiality deed, and people wonder whether the name matters.

This article looks at the practical side: what these documents usually deal with, the points worth agreeing before documents change hands, and how the terms connect to the way you actually share information. It is not advice on drafting or relying on an agreement. For that, speak to your lawyer.

Different names, overlapping documents

In everyday New Zealand business use, "NDA" (non-disclosure agreement) and "confidentiality agreement" are often used for the same kind of document: one party agrees not to disclose or misuse information the other gives it. What a particular document does depends on its wording, not on its title. A short, one-way NDA and a detailed confidentiality agreement in a sale process can look very different, even though both deal with confidentiality.

The useful question is not which label to use, but what the document says. Your lawyer will choose the form that suits the situation; your job is to know which commercial points you need it to cover.

One-way or mutual

A one-way agreement protects information flowing in one direction: you are sharing, they are receiving. That is typical when a business is being sold, or when a start-up shows its plans to an investor.

A mutual agreement covers both sides. It is common when two businesses are exploring a joint venture or an integration, and both will share sensitive material. If the other party will see your information and you will see theirs, a one-way document drafted only for your protection may not be what either side needs.

The commercial points worth settling first

Before you send a draft to your lawyer, it helps to have a view on these points. They are the ones that tend to cause friction later:

What counts as confidential: everything you share, or only material marked as confidential, and whether oral discussions are included.
The purpose: what the recipient may use the information for, such as evaluating a possible purchase, and nothing else.
Who may see it inside the recipient's organisation, and whether their advisers, financiers and related companies are covered.
How long the obligations last, and whether some information, such as trade secrets, needs longer.
What happens at the end: return or destruction of copies, and how that is confirmed.
Whether the recipient may approach your staff, customers or suppliers.
The usual exceptions, such as information that was already public or that the recipient developed independently.

Many of these points connect directly to how documents are shared, which is where the agreement and the tools you use need to line up.

Where the agreement meets the data room

An agreement sets out what people have promised. A data room shapes what they can actually do. The two work best together.

Acceptance before entry

In ShareAndGo you can require visitors to accept an NDA before they enter a room. Each acceptance is recorded with who accepted and when, so you are not chasing signed copies across email threads at the start of a process. Whether click-through acceptance is appropriate for your agreement is a question for your lawyer; some parties will still want a signed document as well.

Matching access to the purpose

If the agreement says information may only be used to evaluate a transaction, it helps to share only what that evaluation needs. Groups let each party see only the folders you allow, so the buyer's technical adviser need not see the employment files.

Matching the "who may see it" clause

Because ShareAndGo recipients confirm their email address with a six-digit code, the people inside the room are the people you invited. If the agreement allows the recipient's advisers to see material, invite them directly rather than relying on forwarded copies.

Making the end of the process real

Return-or-destroy clauses are hard to check when documents were emailed. If view-only recipients never received the original files, there is far less to return. Invitations can carry an end date and be revoked at any time, and the audit log records who viewed and downloaded what while access was open.

Watermarks and records as practical deterrents

Agreements work partly because people know there is a record. A personal watermark showing the viewer's name, email address and the date on every page they see is a constant reminder of that. The audit log records views, downloads and changes, with each entry chained to the one before so alterations can be detected.

These tools record events. They do not decide what an agreement means or what follows if someone breaks it; that remains a matter for the parties and their lawyers.

A sensible order of events

Agree the commercial points above with the other party.
Have your lawyer prepare or review the agreement.
Set up the room with groups that match who may see what.
Turn on NDA acceptance for the room if you are using it, and set invitation end dates.
Invite each person directly, and review the activity record as the process runs.
At the end, revoke access and export the room and its index for your own records.

Questions people ask

Is an NDA the same as a confidentiality agreement?

The terms are often used for the same kind of document. What matters is the wording of the particular agreement, so ask your lawyer which form suits your situation.

Can ShareAndGo replace a signed NDA?

ShareAndGo can require visitors to accept an NDA before entering a room and records who accepted and when. Whether that suits your agreement, or whether you also need a signed copy, is a question for your lawyer.

What happens to documents when the agreement ends?

In ShareAndGo you can revoke access at any time, or set end dates on invitations. View-only recipients never receive the original files, and the audit log records any downloads that were allowed.