A Non-Disclosure Agreement (Confidentiality Agreement) is an essential legal tool used to protect sensitive information and business secrets. A Non-Disclosure Agreement is typically signed when two parties wish to share important information but want to prevent its disclosure to third parties. However, drafting and implementing a Non-Disclosure Agreement requires caution and strict compliance with legal regulations. Below are some main considerations:
A Non-Disclosure Agreement (Confidentiality Agreement) is an essential legal tool used to protect sensitive information and business secrets. A Non-Disclosure Agreement is typically signed when two parties wish to share important information but want to prevent its disclosure to third parties. However, drafting and implementing a Non-Disclosure Agreement requires caution and strict compliance with legal regulations. Below are some main considerations:
I. Current states of using Non-Disclosure Agreements
Non-Disclosure Agreements are increasingly being used in Vietnam, especially among enterprises and organizations. Small and medium-sized enterprises (SMEs) and startups often include Non-Disclosure Agreements in labor contracts to safeguard critical information and business secrets.
The content of a Non-Disclosure Agreement varies depending on the specific nature of each enterprise and may include different provisions. Information protected by an Non-Disclosure Agreement may include: Production (manufacturing), product information, financial and accounting data, sales and marketing information, customer and supplier details, software programs, files, processes, and instructional documents.
However, the use of Non-Disclosure Agreements must comply with Vietnamese legal regulations. Breaching a Non-Disclosure Agreement may result in compensation for damages.
Overall, Non-Disclosure Agreements are becoming an essential means for protecting confidential information and trade secrets in an increasingly competitive and globalized business environment.
II. Legal regulations on Non-Disclosure Agreements
1. Definition of a Non-Disclosure Agreement
A Non-Disclosure Agreement (Confidentiality Agreement) is a legal contract designed to establish a confidential relationship. Under such an agreement, the parties agree not to disclose or share any obtained sensitive information with third parties without the consent of the involved parties.
2. When is the Non-Disclosure Agreement necessary?
The Non-Disclosure Agreement is typically required in the following situations:
- During the negotiation, signing, and execution of contracts: Confidentiality plays a crucial role in protecting rights and enforcing obligations among contractual parties.
- After contract termination or cancellation: Sensitive information acquired during contract execution may still require protection even after terminating the contract.
- When signing labor contracts between employers and employees: Employees commit to not disclosing or publicly sharing confidential documents or information belonging to employers
- In contractual relationships between parties: Non-Disclosure Agreements are often incorporated into contracts through one or more confidentiality articles.
3. Forms of the Non-Disclosure Agreement
The Non-Disclosure Agreement can be included in various legal documents, such as:
- Civil contracts;
- Labors contracts: In order to bind the employee's responsibility after finishing work with the enterprise, the employer can sign the Non-Disclosure Agreement;
- Commercial contracts: Non-Disclosure Agreements can be incorporated into commercial contracts to protect sensitive information and trade secrets.
- Non-Disclosure Agreements.
III. Common questions about the Non-Disclosure Agreement
1. Does the validity of the Non-Disclosure Agreement depend on the validity of the contract?
Currently, only arbitration clauses are legally recognized as independent from the contract. This means that, apart from arbitration agreements, if a contract is declared completely invalid, all clauses within the contract, including confidentiality obligations, also become invalid. In cases, the parties no longer have any rights or obligations arising from the contract (including confidentiality obligations), except for obligations related to contract invalidation, such as compensation for damages. In other words, the recipient of confidential information will not be obligated to maintain confidentiality for any information obtained during the execution of the contract if the contract is rendered void.
Thus, the validity of the Non-Disclosure Agreement depends on the validity of the contract.
2. Can the Non-Disclosure Agreement be signed as a standalone agreement?
Yes, the Non-Disclosure Agreement can be signed independently. In this case, the agreement will be considered a separate contractual arrangement rather than a clause within a larger contract.
3. What are the consequences of breaching the Non-Disclosure Agreement?
Breaching the Non-Disclosure Agreement can lead to serious legal consequences, including:
- Compensation for damages: The breaching party may be required to fully compensate the other party for any damages incurred. In some cases, an additional fine may also be imposed.
- Administrative penalties:
+ Based on point a, Clause 2, Article 84 of Decree 15/2020/ND-CP (amended by Clause 30, Article 1 of Decree 14/2022/ND-CP), a fine ranging from 40,000,000 VND to 60,000,000 VND may be imposed for the wrong use of personal information collected without the subject's consent. A fine ranging from 30,000,000 VND to 50,000,000 VND may be applied for failing to implement necessary management or technical measures to protect personal data according to Clause 3, Article 85 of this Decree.
+ A fine ranging from 30,000,000 VND to 40,000,000 VND may be imposed for acts such as stealing, disclosing, transferring, or selling trade secrets of businesses or personal consumer information in e-commerce transactions without proper authorization according to point b, Clause 5, Article 63 of Decree 98/2020/ND-CP.
- Depending on the severity of the breach, the offender may face criminal prosecution under Article 288 of the 2015 Criminal Code.
4. Why should you consult a lawyer to draft the Non-Disclosure Agreement?
Seeking legal assistance in drafting the Non-Disclosure Agreement offers several advantages:
- Expertise: Lawyers have in-depth legal knowledge and experience in drafting contracts and agreements. They ensure that your Non-Disclosure Agreement complies with all relevant legal regulations.
- Protection of rights: A lawyer can help you identify and safeguard your rights. They will clarify your legal obligations and responsibilities, as well as the consequences of breaching the agreement.
- Dispute prevention: Having a lawyer draft your Non-Disclosure Agreement can help prevent potential legal disputes. They will create a clear and precise agreement, reducing misunderstandings and conflicts that could lead to legal issues.
- Time and effort savings: Drafting the Non-Disclosure Agreement requires significant time and effort. A lawyer can help streamline the process while ensuring that the agreement is both effective and legally sound.
In summary, consulting a lawyer when drafting the Non-Disclosure Agreement is a crucial step to ensure that your interests are well protected.
IV. Legal consultation services for Non-Disclosure Agreements
The information above addresses common concerns regarding Non-Disclosure Agreements, provided by NPLAW. If you require further assistance or clarification, please contact NPLAW through the following channels:
