Confidentiality Agreement In Chinese

Foreign companies doing business with China too often make the mistake of protecting their intellectual property from China by using a Non-Disclosure Agreement (NDA) on the Western model. The above illustrates the general approach taken by our Chinese lawyers in drawing up an agreement with China. We don`t want our customers to complain. In order to reduce the likelihood that you will have to go to court, it is important that the Chinese side think that it would be relatively easy for you to file a complaint and impose yourself. That is exactly what China`s NNN agreements do. You can also add that the parties to the agreement cannot unnecessarily share information with other employees, sister companies, subcontractors or third parties. The non-compliance clauses in a China NNN contract offer two main advantages. First, they force the Chinese party to realize that it will face real and quantifiable consequences if it violates the NNN agreement. Second, a certain amount of money provides for a certain minimum amount of damage. This sum then gives a Chinese court the basis for a seizure of assets prior to the judgment. A credible threat to seize the assets of your Chinese counterpart increases the likelihood that this Chinese company will comply with your NNN agreement and that you will be able to quickly take over the Chinese company if not. The identity of the contracting parties (name, address and other basic identifying information). This part of the agreement is usually another area in which too many U.S.

companies have already slipped. Most U.S. companies do not know or understand Chinese law and, because of their concerns, normally decide that their U.S. local state law applies to the jurisdictional agreement before a U.S.-based court as well. 1. The NDA generally requires that the party receiving the confidential information respect the confidentiality of the business secrets it receives. This is not what you need for China. It is easy to see why so many Western entrepreneurs believe that an NDA agreement will protect them in China; they are simply used to drawing one for signature almost everywhere in the Western world. But what you need to recognize, is that the Chinese legal system is very different from that of the United States, the EU, Australia, Canada and Latin America (and many other places) and you simply cannot assume that the procedures/standards/analysis/laws in force in the West will apply in the same way in China, especially because they rarely and certainly do not do so when it comes to confidentiality agreements. It is almost useless to use a Western-style NDA with Chinese companies, and it is often worse to use such an NDA than to have no contract at all. See Why Your NDA WORSE Than Nothing Is for China.

A confidentiality agreement (NDA), also known as a confidentiality agreement, is a legally binding contract between two or more parties that describes how confidential information should be handled. As a general rule, an NDA provides that information provided by one party to another can only be used for authorized purposes and restricts those who may have access to that information. In short, a well-developed NOA is the most effective legal mechanism we have to ensure that your sensitive information remains in the wrong hands.