Non-Disclosure Agreements (NDAs) in Germany

German Contract Lawyers

Non-Disclosure Agreements (NDAs) in Germany

German Contract Lawyers

When a company cooperates with a supplier, its employees, investors, freelancers and other companies or parties, sensitive information and business secrets are often exchanged or disclosed. This exchange can already take place when two parties initiate a contract. However, it is essential for a company to preserve information and be treated confidentially by a contractual partner. Therefore, non-disclosure agreements (NDA) are necessary for ensuring the confidentiality of information that is not to be made accessible to the public.

Should you have any questions or require individual and personal legal advice regarding NDAs in Germany, please don’t hesitate to get in touch with the lawyers of Schlun & Elseven Rechtsanwälte.

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Legal Protection through Non-Disclosure Agreements (NDAs)

The non-disclosure agreement (NDA) is a contract, and it serves to protect confidential information. The parties declare to treat the information to be disclosed and made accessible based on cooperation as confidential and to maintain it. Since the exchange of internal and sensitive information is already possible during the initiation of a contract, NDAs are often drawn up and signed before a company negotiates an agreement with its business partners. There are two possible types of NDAs, bilateral and unilateral agreements. While the two-sided non-disclosure agreement obliges two parties to maintain confidentiality, the one-sided non-disclosure agreement only instructs one party to keep the information confidential. Whether the bilateral or the unilateral deal is more appropriate depends on your business plan.

As NDAs are designed to protect trade secrets, § 2 No. 1 GeschGehG outlines what information constitutes a trade secret within the meaning of the said Act and is thus deemed to be particularly worthy of protection:

A trade secret is “[…] information

  1. (a) which is not generally known or readily accessible, either as a whole or in the precise arrangement and composition of its components, to persons in the circles which normally handle that type of information and is therefore of commercial value; and
  2. (b) which is subject to reasonable confidentiality measures under the circumstances by its rightful holder; and
  3. (c) for which there is a legitimate interest in secrecy […]”.

A confidentiality clause in a contract or reliance on the contractual partner’s intention to maintain secrecy is often insufficient to obtain adequate protection. Companies are advised to sign a non-disclosure agreement