Read this blog to understand what happens if any one of the parties involved in an NDA breaks the agreement rules.
NDA or non-disclosure agreement is a legal agreement that binds an employer to the company, thereby agreeing that they will not disclose the sensitive information about the company, individual, or an entity in public.
But what happens in case of a non-disclosure agreement breach? There are significant consequences that an individual has to face if they breach the NDA. Let us learn about the benefits and what the results are one by one in detail.
Benefits of a Non-disclosure Agreement
The non-disclosure agreement is essential for the smooth functioning of a company. But what are its benefits? Let’s learn about the same in detail:
- The non-disclosure agreement helps in protecting sensitive information about the company.
Most companies have certain sensitive information about them that needs to be protected from getting into the hands of the competitors. As disclosing the same can lead to exploitation of the data. But if the company has a non-disclosure agreement, it can protect the sensitive information from getting into the wrong hands.
- It helps in leaking new ideas and services and ensures the retainment of the rights to the owner.
New ideas and services are something that helps a company’s development and progress. Further, having a non-disclosure agreement will ensure that the rights of the new ideas and services are retained with their rightful owner. After all, every company’s idea is unique, and nobody should exploit it.
- A non-disclosure agreement helps the employees know which information is sensitive and should not be leaked.
In some cases, the employees have no idea which information about their company is sensitive and should not be leaked. But non-disclosure agreements will help the Employees Contract to know what they can disclose and what they cannot. It further gives them clarity about what is right and wrong information.
- Non-disclosure agreements help the partners of a business partnership protect their trade secrets.
Every business partner has its trade secrets that nobody should disclose. Further, the NDA ensures that the trade secrets of the partners are safe and not leaked. Each trade secret is unique, and it should be the same until and unless the partners decide otherwise. We need to gather all details for business requirement before making NDA Contract Break Online.
What Are the Consequences of a Non-disclosure Agreement Breach?
The consequences of breaching a non-disclosure agreement are always mentioned in the legal document. So while attesting to the record, the individual should always keep in mind the implications and act accordingly. These are some of the results an individual has to face in case of a non-Disclosure Agreement breach:
- A lawsuit against the breach of contract
One of the most daring consequences of breaching the non-disclosure agreement is the lawsuit against the individual filed by the company. When you disclose the most sensitive information about the company or an entity, the company or the entity has the right to file a case against the same. Further, the individual will have to face the law and accept the punishment that the judiciary decides.
- Monetary fines
The following consequence that can levy on you if you breach the non-disclosure agreement is the monetary fines. The law will not only sentence you to the maximum punishment, but you may have to pay the monetary penalties of lakhs or thousands. This can lead you a financial crisis for you in the future. So whenever you think of breaching the NDA, remember that you might lose all your hard-earned money by doing so.
- Termination of employment
Suppose the individual is still employed in the company and has disclosed the information about the company. Then, they can get terminated from the company. So along with legal consequences and monetary fines, you can lose your hard-earned job. However, this is only applicable when the non-disclosure agreement is signed as a clause in the individual’s employment. So ensure that you read and go through the document before attesting it.
Is it Okay to Break the Non-disclosure Agreement?
The most important question we all have is whether it is okay to breach the NDA? The answer for the same is no. However, there are exceptions. For instance, if the employee witnesses an illegal activity that is well against the company’s interests and its employees, they can breach the non-disclosure agreement by consulting a lawyer.
Also, suppose the employee is the victim of an unhealthy work environment. In that case, they can consult a lawyer, look for options to breach the contract, and bring justice to themselves and other employees. The non-disclosure agreement that is considered a legally enforceable contract for the employees is being scrutinized. One of the reasons is the enforcement of illegal activities under the disguise of the non-disclosure agreement. Lawmakers, attorneys, and the judiciary have introduced legislation to ban the non-disclosure agreement in case of severe offences, including misconduct of the superiors over their employees.
Further, the judiciary can even legally punish the individual who breaches the non-disclosure agreement of their company. But in some cases, the law prohibits the companies from using the NDA as a scare tactic against the victims from speaking out about the company’s illegal activities. Further, the employees can breach the contract in such cases, and the judiciary will protect them.
Overall, a non-disclosure agreement is an essential legal document that every company should have. However, the NDA should state which information is sensitive and should not be disclosed. Further, they should ensure that a non-disclosure agreement doesn’t force the employees to abide by the legal contract if they witness something illegal.
Even though they have many benefits, the enforceable limit of a non-disclosure agreement is still a debatable topic. However, whatever might be the result of the debate, it goes without saying that every action has an equal and opposite reaction.
Thus, while attesting to the non-disclosure agreement, ensure you go through the document carefully and make sure you are ready to face the consequences and sign them with Vakilsearch. After all, it is always better to think twice before you jump to a conclusion.
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