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Answering Non-Disclosure Agreement FAQs with Joshua D. Brinen

Mar 27, 2024 | Business of Law

What is a Non-Disclosure Agreement?

A non-disclosure agreement is an agreement between two or more parties that normally occurs before or after a contract is executed. Typically, the non-disclosure agreement or NDA is signed before parties start negotiating a contract. The non-disclosure agreement’s purpose is to protect the confidential information of both parties or one party so that the receiving party cannot use that information for any other purpose other than the intended use. The non-disclosure agreement will last for either a term of years or on a specific event. The non-disclosure agreement is usually superseded by a formal contract consummating the deal. A nondisclosure agreement may be sidestep if the information was developed independently, enter the public domain through no action of the receiving party, or through other instances such as court or governmental order.

How Long Can a Non-Disclosure Agreement Last?

Depending on the reason the non-disclosure agreement is issued, a non-disclosure agreement can last for several months or several years or for a period of time to extend beyond the end of a transaction. In New York, non-disclosure agreements are generally disfavored and will only be enforced on a shorter period of time.

What are the Different Types of Non-Disclosure Agreements?

Non-disclosure agreements, like the suit I’m wearing, should be tailored to their specific use. Non-disclosure agreements, or NDAs, come in several different varieties. There is a mutual non-disclosure agreement where both parties can be the provider of the confidential information and the recipient of the confidential information, and both parties can be bound by the protective provisions of each. There is the unilateral non-disclosure agreement where one party is the provider of the information and one party is the recipient of the information, and generally the recipient of the information is bound by the confidentiality provisions and the provider might not be. In addition to the two types of non-disclosure agreements, mutual and unilateral, non-disclosure agreements can come in several flavors. There can be a general non-disclosure agreement. There can also be a transactional non-disclosure agreement. A transactional non-disclosure agreement tends to only consider the confidential information for a specific transaction and not a more general confidentiality provision. Finally, certain securities law provisions can be added to either the general or the transactional non-disclosure agreement to make sure that people in receipt of this confidential information do not trade on the public markets in violation of the securities laws.

What is a Non-Circumvention Provision?

A non-circumvention provision of either a contract or a non-disclosure agreement is a provision by which one or both parties agree that any persons introduced to them for the purposes of making a deal will not be contacted without the express knowledge and compensation of the introducing party. Non-circumvention agreements are very important to brokers and dealers and bankers who do not want you to take their intellectual capital and go raise money without paying them for the introduction and for the raising of the capital.

What is a Non-Solicitation Provision?

A non-solicitation agreement or non-solicitation provision of another agreement is a provision by which one party agrees to not solicit either the employees of the introducer or the customers of the introducer. The non-solicit provisions power comes in preventing someone from losing their employees or losing the intellectual capital of their customers. A non-solicitation provision can be part of a non-disclosure agreement or another agreement.

What is a Non-Competition Provision?

A non-competition provision is a provision either in a non-disclosure agreement or another contract by which one party agrees to not compete with the other party for a period of time. Non-competition provisions like non-disclosure agreements are greatly disfavored by the courts. A non-competition provision cannot prevent a party from not being able to conduct themselves in their profession. It must be limited in time and scope and geographic area. An effective non-competition provision will not last terribly long and will not last beyond a certain range and will not last and will not affect the overarching career of a person who engages in a non-competition provision. That being said, a non-competition provision that is coupled with the purchase of a business will tend to last longer. The reason and public policy behind this is that you are not just an employee, but you are receiving additional compensation for that business, and the purchaser of that business is entitled to prevent you from competing for a period of years.

What is a Right of First Offer?

A right of first offer is a contractual provision in a transaction by which the person who agrees to the right of first offer will first offer the next transaction to the person or party that they engaged in the transaction with. For example, if an investment provision has a right of first offer included in the investment contract, the issuer must offer before going to market or offering anyone else the right of the initial investor to complete that investment.

What is a Right of First Refusal?

A right of first refusal is a contractual provision by which one party agrees that once it has a good valid offer in hand, it will offer for refusal to another party who is on the other side of that right of first refusal. For example, if an investment or banking contract has a right of first refusal, if the issuer receives an offer or solicits an offer to buy securities with certain terms and certain rights, the issuer is obligated under the right of first refusal to show the other party and let them meet or beat that offer.

What is the Difference Between a Right of First Offer and a Right of First Refusal?

Both rights are contractual provisions that require one party to show and give an opportunity to another party to either engage in the transaction or make an investment. However, they differ in that the right of first offer requires the offering party to go to the other party before getting an offer in hand. A right of first refusal allows the offering party to go to market and to seek an offer, obtain a binding offer, and then take that offer to the other party.

What is a Garden Leave?

A garden leave is a colloquial or slang term. Usually in the financial services and investment banking industry for an amount of time after a non-compete provision, that time is referred to as garden leave. And garden leave is a time during which the only thing you can do is tend to your garden because the non-competition provision is so significant.

How Do I Get Out of a Non-Disclosure Agreement?

Depending on your role in the non-disclosure agreement or the venue in which the non-disclosure agreement is entered into. There are many ways to avoid being bound by the non-disclosure agreement. If the non-disclosure Agreement merely protects information, both confidential information, clients and employees, it will be very difficult to avoid being bound by that non-disclosure agreement. However, if the non-disclosure agreement or an agreement with these provisions includes a non-competition provision that may be avoidable under a public policy argument depending on how long and how far, and what the non-competition provisions entail. The other consideration is did you enter into this agreement as part of a larger capital transaction? If you did, that may also make avoiding the non-disclosure agreement more difficult.


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I formerly worked as a satellite employee from my home state of New Jersey. I ended my employment with my former employer in 2016. In 2018, I was sued by my former employer for $1.1 million in Illinois State Court. I was referred to Brinen & Associates, LLC by a friend who is a client of the firm. Brinen & Associates, LLC came highly recommended. I contacted Joshua Brinen and then had a consultation at his office with his colleague Mark White. Together, Messrs. Brinen and White explained my options...

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