What is an NDA (confidentiality agreement)?

When two parties commit to confidentiality through an agreement, they secure their commitment. The parties will mention in a contract the information they consider to be sensitive. The goal is to put everything in writing so that the parties not to reveal or use the confidential information without the consent of the other party.

First of all, data protection is an innovative and relatively new law. Thailand’s Personal Data Protection Act was gazetted on May 27, 2019, referred to as the PDPA Documents. This new law was inspired by the RGPD, which is similar to European Union law. Thus, the notion of digital data is defined by any information relating to a natural or legal person. For example, the name, first name and address are personal data.

The non-disclosure agreement is based on the same regime, which is to protect confidential information in contractual relationships. Contractors who give their consent to a confidentiality agreement, engage themselves to preserve confidential data, under penalty of engaging their responsibility. It is essential to sign a confidentiality agreement before signing any contract, to preserve ownership of your personal or confidential information.

Otherwise, your business could be severely impacted, as the other party could freely use your data or even sell it. In view of the competition, some data are indispensable for a company, such as ideas for development, projects, technical innovations etc.

The confidentiality agreement is a freely drafted contract and depends on the will of the parties. However, some information must be included to ensure that the contract protects you if your information is disclosed. We recommend that you use our professional template translated into Thai English to ensure that your confidential information is well protected in Thailand. You can easily customise the template with your own information or ask an expert to make a contract that suits your needs.

The non-disclosure agreement must specify the information that the parties want to protect. In order to ensure that the agreement is fully effective, the agreement must be sufficiently clear and precise so as not to be open to interpretation.

It is recommended in practice to determine a deadline for this obligation in order to make the obligation fully effective. Indeed, if you choose an unlimited duration commitment, you risk that your co-contractor asks for the termination of this contract, provided that you respect a reasonable notice period.

In most cases, both parties have a mutual obligation to respect the agreement. This contract is then said to be bilateral. However, it is also common in practice to enter into a unilateral confidentiality agreement. Indeed, it is possible to limit the scope of the NDA to only one of the contracting parties. In all cases, the NDA must include the signatures of both parties. Finally, for some NDAs, confidentiality can be extended to third parties, provided that the contract specifies this.

If you are an employer: In your employer-employee relationship, you can oblige an employee to respect total discretion in the performance of his or her duties. The agreement will be unilateral. However, not everything can be included in such an agreement. The agreement must comply with the general rules of public policy advanced by the Ministry of Labour. For example, the agreement is unenforceable when it imposes secrecy on a party regarding a crime or offense. In the case of a confidentiality agreement between an employer and employee, you can download the employee confidentiality agreement provided in the employment and HR documents.

The non-disclosure agreement can be found at both the pre-contractual and contractual stages.

Indeed, at the stage of discussions, the parties may agree to protect themselves in view of a future relationship. It is common in practice to exchange strategic information or sensitive data in the context of business negotiations. This protection will be effective even if the contractual relationship does not succeed.

Moreover, when there is an established commercial relationship, the parties can also choose to reinforce the discretion of their commercial partner within the framework of their partnership agreement.

The non-disclosure of an NDA agreement can be extremely dissuasive. The failure to comply with an NDA and in particular with the confidentiality it imposes can lead to more or less severe sanctions depending on what the contract provides.

When the obligation of result has not been respected due to the disclosure of information, even if not at fault, the defaulting party is contractually liable. This contractual non-performance is sanctioned by damages, the proof of which is largely facilitated.

In this case, the agreement may include a penalty clause in order to provide for the sanction by imposing damages fixed at a lump sum. This clause ensures greater visibility and thus reinforces the dissuasive nature of the agreement.

To conclude, the drafting of the confidentiality agreement is an important step, so do not hesitate to download our NDA template specially drafted and translated into Thai english to be applicable in Thailand or to ask our experts to draft a tailored document for you.