Part 2 – Contracting between Businesses – Considerations for the Protection of your Business

protection of your business

Contracting between businesses does not only require one to consider the transactional requirements, but also the protection of proprietary information of a company. When your company contracts with an outside company it is likely that you are allowing such company access to your company. This access may result in the contracting company having access to information that is essential to your operating methods or the product or service you provide to the consumer. To mitigate any potential infringement of your security it is essential to ensure that you protect your company contractually against any potential exposure. Part two of this article series will establish some protections required to ensure your company is well guarded against potential exposure.

When opening your business up to another service provider the very first thing one must obtain is that of a non-disclosure agreement. This is essential where another business may come in and provide various services such as IT, consultation on streamlining your processes, etc. Certain businesses operate in an area where they have access to an insurmountable amount of proprietary information of the business which they seek to assist, should the business or any of its employees make use of trade secrets you have spent a considerable amount of money and time developing, it may result in a catastrophic loss to your business. To protect against such an outcome, a non-disclosure agreement is essential before allowing any external company access to your business. This agreement sets out what information that company may have access to and what they may or may not reproduce outside of your company. Further, it sets in place consequences for the breach of such an agreement which acts as a deterrent for such breach.

The next essential agreement which must be put into place with an outside company is that of a release. This is where an outside company may provide a service in which they take on an assumed risk. This may be in instances where window cleaners for high-rise buildings are required to propel down the building to complete their tasks which innately incurs a high risk that they may suffer a devastating injury. Another example of this is where a petroleum company outsources the cleaning of their tanks which contain highly flammable liquids and such employees risk devastating injuries. Here the company contracting the third party would ensure that such party signs a release which would then release the business from any liability.

There is a wide range of factors that must be taken into consideration when your company contracts with an outside service provider. Should you require assistance in the drafting of a contract between your business and another or any legal assistance in ensuring the progress of your company contact us and we will gladly assist.


Saeedah Salie
Candidate Attorney


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