Abstract
As we delve into value deconstruction, the number of contractors will increase a great deal, and every specialty will have its own parameters. The contract by its own will not be able to accommodate all clauses and conditions that may be due for changes. Now imagine, what would happen if important information like trade secrets of any corporation or business were to be leaked to competitors? And wouldn't it be so much better to legally oblige to privacy and urge those who consent to keep the information in question completely under wraps? For this reason, it is important to have an ecosystem of agreements such as NDAs, SLAs, and others to complete the chain and allow for efficient governance and risk management considerations. NDAs and confidentiality provisions have groundbreaking propensity. The design of such agreements is fundamental and various parameters must be considered. This chapter directs attention to these subjects and concerns by discussing the various types of complementary agreements and how they can be attached to the original contract to add value and reduce risk.
TopBackground
The introduction of new technology and regulatory amendments brought about a phenomenon where parts of the traditional industry value chain started breaking away and either forming new industries or combining with parts of different industries and this break up was titled ‘deconstruction’. (Bresser, Heuskel & Nixon, 2000). New concepts of strategy and organization are required to cope with this new business architecture. Confidential information such as customer lists, proprietary technology, pricing information, and marketing plans are critical business assets that can be jeopardized if not managed properly. Contracts are a vital part of building relationships and completing business transactions. A study conducted on what people considered were the most relevant reasons to create contracts found that contracts had many purposes and thus many different reasons for why they are important. Most importantly, contracts are the main source of relationship building for an organization (Concord Editorial, 2018).
Key Terms in this Chapter
Service-Level Agreement: A service-level agreement (SLA) is a contract between a service provider and its customers that documents what services the provider will furnish and defines the service standards the provider is obligated to meet.
Non-Compete Agreement: A noncompete agreement is a contract between an employee and an employer in which the employee agrees not to enter into competition with the employer during or after employment. These legal contracts prevent employees from entering into markets or professions considered to be in direct competition with the employer.
Attachment: Contract attachments are added to a contract after it has been drafted. In most cases, attachments do not change the original contract.
Non-Disclosure Agreement (NDA): A work-related contractual agreements which ensure that, prior to being given access to sensitive information or data, an individual or organization recognizes and comprehends their legal responsibility to maintain the confidentiality of said sensitive information.
Value Deconstruction: When vertically integrated value chains became looser and start to break up. This way, it ends up with different layers fulfilling the same functions as before in the industry. But, this time, each layer contains several independent parties interacting with each other independently and interacting with the rest of the layers.
Contract: A binding agreement between two or more persons or parties, one that is legally enforceable.
Trade Secrets: Trade secrets are intellectual property (IP) rights on confidential information which may be sold or licensed. They are commercially valuable and known only to a limited group of persons.