Non Disclosure Agreement - Free Template to Download

What is a Non-Disclosure Agreement(NDA)?

A non-disclosure agreement (NDA), also known as a confidentiality agreement, is a legal contract between two or more parties in which one party (the disclosing party) undertakes to share confidential information with the other party (the receiving party), which in turn undertakes to keep the information confidential. This type of agreement is often used in business, particularly when companies are considering working together or when a new product or service is being developed and the details must be kept confidential.

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Key Components of NDAs

Here are some of the key parts of an NDA that should be included in every agreement:

1. Definition of sensitive information: The definition of confidential information is undoubtedly the most important element of any confidentiality agreement. This clause clearly states which information may not be disclosed. It is, in fact, the cornerstone of the entire agreement.‍
2. The parties: When drafting a confidentiality agreement, it is important to name not only the disclosing and receiving parties, but also any other parties who may need access to the confidential information, such as accountants, lawyers, or third-party contractors. These additional recipients are crucial to the success of the contract and should be included in the confidentiality agreement.‍
3. Timeframe: To protect confidential information, it is important that any confidentiality agreement stipulates a final period of time during which the information may not be shared. This provides clarity as to when the agreement expires and how long the information will remain confidential.‍
4. Exclusion of confidential information: To protect both parties, you should confirm in your privacy statement that a legal obligation to disclose confidential information does not violate the agreement. In addition, as the disclosing party, you should include a passage that states that the receiving party will only disclose the necessary information if compelled to do so and will notify you in such a case.‍
5. Obligations of the receiving party: The NDA should clearly state the obligations of the receiving party, including its duty to maintain the confidentiality of the information and any restrictions on its use of the information. This section should also specify any security measures that the receiving party must take to protect the confidential information.‍
6. Remedies for infringements: To ensure that your sensitive information remains protected, be sure to include a clause in your confidentiality agreement that states what action can be taken if the recipient party breaches the agreement. This can prevent lengthy legal disputes and gives you the opportunity to seek fair legal remedies. Just make sure the clause is appropriate for both parties and doesn't deter the recipient party from signing.‍
7. Applicable law: Even though contracts aim to avoid conflicts, violations and misunderstandings can still occur. It is therefore important that you specify the place of jurisdiction in your non-disclosure agreement to avoid potential disputes.‍
8. Termination: This clause specifies when the agreement ends and how one party will notify the other. After termination of the agreement, the protection of confidential information is no longer valid.

It is also important to note that NDAs should be written by an attorney or using a standardized NDA template to ensure that the agreement is legally binding and enforceable. In addition, parties should review and sign the NDA before sharing confidential information.

Types of NDAs

There are three main types of confidentiality agreements:

1. Unilateral Confidentiality agreement: A unilateral non-disclosure agreement (NDA) is a legal document that allows a company to share confidential information with another company, usually as part of an M&A transaction. This agreement allows the sharing company to transfer all protected information to the recipient, while the latter undertakes to keep it confidential from third parties.‍
2. Bilateral NDA: A bilateral NDA, also known as a mutual or two-sided NDA, is used when two parties intend to exchange information but keep it secret from third parties. It is often used in business negotiations, such as joint ventures or mergers.‍
3. Multi-party NDA: This type of NDA involves multiple parties and one party shares sensitive information while expecting the others to protect it from outside sources. The information that is shared is considered valuable and the disclosing party is relying on the others to maintain its confidentiality.

When Should You Use a Non-Disclosure Agreement?

1. When sharing confidential information

NDAs are a valuable tool when sharing sensitive information for a specific purpose, such as sharing confidential business plans with investors or testing protected software with third parties. This helps protect sensitive information.

2. When hiring and terminating employees

NDAs protect confidential employer information when hiring and terminating employees. They can prevent new hires from sharing information with prospective employers or using it for their personal advantage, and they ensure that departing employees do not use or share confidential information.‍

3. When working with third parties

NDAs are useful when multiple parties share sensitive information while collaborating on a project, such as when a research and development company shares information with a manufacturing company to bring a product to market. They help protect sensitive information and prevent unauthorized use or disclosure.‍

4. When protecting sensitive information‍

NDAs play a critical role in protecting sensitive information by requiring parties involved in a confidential relationship to maintain the confidentiality of the information and not to share it with unauthorized third parties. By setting specific conditions, NDAs provide clear guidelines for maintaining the confidentiality of information.

Writing a Non-Disclosure Agreement

Here are a few key considerations when drafting a confidentiality agreement

• Define sensitive information: It is critical that the NDA clearly defines what confidential information is. The definition should be specific and comprehensive and include examples of the types of information covered by the agreement. This can help both parties understand what information is considered confidential and what restrictions apply.‍
• Determine the scope of the NDA: To ensure a comprehensive NDA, the contracting parties, the duration of the confidentiality obligation and the geographical scope must be precisely defined. In addition, exceptions such as information that is already publicly available or required by law should be clearly defined within the scope of the NDA.‍
• Defining the obligations of the receiving party: To effectively protect sensitive information, the NDA must set the receiving party's obligations, including restrictions on use and disclosure. The agreement should also specify the consequences of an infringement, such as termination, injunctive relief or payment of compensation.‍
• Inclusion of a clause for the return or destruction of confidential information: It is advisable to include a clause in the NDA that requires the receiving party to either destroy or return all confidential information upon request or upon termination of the agreement. This measure can significantly contribute to maintaining the confidentiality and security of sensitive information.‍
• Seek legal advice: Since an NDA is a legally binding contract, it is important to seek legal advice when drafting it. An attorney can help ensure that the NDA fully protects the sensitive information in question and is enforceable under law.

How to Use This NDA Contract Template

1. Review the NDA contract template

Before using the NDA contract template, you should review it in detail to make sure it meets your needs. Make sure the template is well-worded and easy to understand, and check that it contains all the important clauses and provisions that you need.

2. Customize the template

Once you've gone through the NDA contract template, you'll need to adapt it to your specific needs. This may mean that you need to change the definition of confidential information, the scope of the agreement, the obligations of the receiving party, and the consequences of a breach of contract. It is important to ensure that the NDA reflects your specific requirements and protects your sensitive information.

3. Fill out the details

Once you've customized the template, the next step is to fill in the details. This includes the names and addresses of the parties involved, the date of the agreement, and any other information specific to your situation.

4. Review and revision

After filling out the details, it is important to review the entire NDA contract to make sure it is accurate and complete. Pay close attention to the definitions, clauses, and provisions and make changes as appropriate.

5. Get legal advice

NDAs are legally binding contracts and it is recommended to seek legal advice when using a contract template. An attorney can help you ensure that the NDA is legally binding and enforceable and that it meets your specific requirements.

6. Both parties must sign the agreement

Once the NDA contract is complete, both parties should sign it to make it legally binding. It is recommended that you have each party sign a separate copy of the agreement and keep a copy for your records.