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Don't make these mistakes with confidentiality agreements

You have to protect your business if you want to stay operational. That means taking steps to preserve your intellectual property and proprietary information through confidentiality agreements.

Confidentiality agreements sometimes get a bad name because of overly aggressive measures taken by a few business owners. In reality, however, they're a perfectly reasonable precaution to take -- and essential to the health of your business.

Just don't make the following mistakes when dealing with confidentiality agreements:

1. Don't wait to have one signed.

Confidentiality agreements should be on the table, discussed, hammered out and signed before you do business with anyone -- even your best friend. Don't wait until after you've started work to bring up the subject. That may already be too late and leave your business secrets exposed.

2. Remember to include reasonable limits.

Confidentiality agreements can fail legal tests if they aren't reasonable. Include a reasonable time limit on any agreement. Don't unduly limit the other party from making a living elsewhere.

3. Don't use vague language.

Another fatal flaw that can kill a confidentiality agreement is ambiguous or vague language. If the agreement is open to interpretation, the agreement is unlikely to be enforced. Remember, however, that you still can't be overly broad. The key is to find specific language to describe the limitations you intend to enforce.

4. Don't rely on a template.

There are sample confidentiality agreements available online, but they're not necessarily good ones. A template is just an outline -- not the narrowly-defined and specific agreement that you need.

If a former employee or anyone else is trying to use your company's private information for their own profit, it may be time to discuss your situation with an attorney experienced in business litigation. If the other party is disputing the limitations of a confidentiality agreement, it may be necessary to take the matter to court.

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