In an increasingly fast-paced and competitive business environment, it is essential to consider the protection of sensitive and confidential data when establishing a commercial relationship. Although Brazilian law itself prohibits the sharing of certain data without the explicit consent of the data owner, when it comes to business negotiations in general or corporate transactions such as mergers and acquisitions (M&A) that involve the sharing of a company’s financial, strategic, and confidential information, as well as that of its clients and suppliers, it is crucial to prepare a legal instrument capable of effectively ensuring such protection.
The Non-Disclosure Agreement (NDA), or Confidentiality Agreement, is an atypical legal contract. When drafted by a qualified professional who respects all legal nuances and material requirements, it creates a secure environment for information exchange—whether bilateral or unilateral—facilitating business deals, partnerships, and collaborative projects, while also demonstrating professionalism and safeguarding the interests of all parties involved. In this context, any information, media, or documents, without limitation, related to the business under consideration, that are disclosed to others and are not publicly known, may be subject to an NDA. This includes commercial, business, operational, marketing, financial data, know-how, and intellectual property.
While an NDA can be used at any stage of a negotiation or commercial relationship, it is especially relevant in the pre-contractual phase, as it establishes premises and rules for ensuring that critical data shared between the parties remains highly confidential and does not reach unauthorized third parties. In this way, a well-structured NDA proves to be one of the first steps towards a secure and transparent negotiation.
However, to ensure the effectiveness of an NDA, it is essential to meet several key requirements. First, clearly defining concepts such as “Confidential Information,” “Receiving Party,” and “Disclosing Party” is fundamental to defining the subject matter and specificities of the relationship, leaving no room for misinterpretation. Furthermore, an NDA should specify, among other items, the duration of confidentiality obligations, limitations on access to information, the responsibilities of the parties involved, and possible penalties for breaches.
On the other hand, failing to use an NDA, depending on the type of business intended, can lead to significant harm to an organization, resulting in damages—financial, reputational, and competitive, among others—since, due to negligence or bad faith, various market players could easily access confidential and strategic information that should be securely protected.
In conclusion, the Confidentiality Agreement is a document with a certain level of complexity, requiring consideration not only of legal aspects but also of business and market factors. It should be customized and prepared by a properly qualified professional to reflect all involved nuances and the specific needs of the commercial relationship in question.
For more information or legal assistance on the subject, the legal team at Marins Bertoldi Advogados is available.
By Vitória A. Bilibio Matschulat
