Watch Your Mouth!

Make sure your nondisclosure agreement (NDA) meets these standards, or it won't be worth the paper it's written on:

• The title of the document must match its contents.

• The NDA must be appropriate for the party (i.e., family and friends or business associates).

• When dealing with business associates, the person signing the NDA must be a designated officer of the company.

• Consideration must be exchanged between parties.

• The NDA must be valid where you intend to do business. An NDA drafted in one state may be invalid in another.

This article was originally published in the August 1999 print edition of Entrepreneur with the headline: Watch Your Mouth!.