The Non-Disclosure Agreement: Elements, boilerplate template, and optional clauses
What is a Non-Disclosure Agreement (NDA)?
A Non-Disclosure Agreement (NDA) is a legal contract between two or more parties that outlines confidential information or trade secrets that the parties wish to share with each other, while prohibiting the disclosure of such information to third parties without prior consent.
What are the elements of a Non-Disclosure Agreement (NDA)?
- Definition of confidential information
- The purpose of the agreement
- The term or duration of the agreement
- The obligations of the receiving party
- Exclusions from confidential information
- The consequences of a breach of the agreement
- The governing law and jurisdiction
- Signatures of the parties involved.
These elements may vary depending on the specific context and purpose of the NDA.
The following boilerplate template can be used on SimpleSignRequest.com
This Non-Disclosure Agreement (the “Agreement”) is made and entered into on [EFFECTIVE DATE] (the “Effective Date”), by and between [PARTY A], a [PARTY A STATE/PROVINCE] corporation having its principal place of business at [PARTY A ADDRESS] (“Disclosing Party”), and [PARTY B], a [PARTY B STATE/PROVINCE] corporation having its principal place of business at [PARTY B ADDRESS] (“Receiving Party”), collectively referred to as the “Parties.”
For the purpose of this Agreement, “Confidential Information” means any and all information, technical data, trade secrets or know-how, including, but not limited to, information regarding research, development, products, inventions, processes, techniques, designs, drawings, engineering, marketing, finances, or other business information disclosed by Disclosing Party to Receiving Party, whether disclosed orally, in writing, or by any other means, that is marked or identified as confidential or that would reasonably be understood to be confidential given the nature of the information and the circumstances surrounding its disclosure.
The Parties wish to explore a business opportunity (the “Purpose”) that may require the disclosure of Confidential Information. The Parties anticipate that during the course of their discussions and interactions, Disclosing Party may disclose certain Confidential Information to Receiving Party, which Receiving Party agrees to keep confidential.
This Agreement shall commence on the Effective Date and continue until [TERM] (the “Term”) unless terminated earlier by either party in accordance with this Agreement.
Obligations of Receiving Party
Receiving Party agrees to use the Confidential Information only for the Purpose and to keep the Confidential Information confidential and not disclose any Confidential Information to any third party without the prior written consent of Disclosing Party. Receiving Party shall take all necessary steps to ensure that its employees, agents, consultants, and any other third party with whom Receiving Party shares Confidential Information under this Agreement, are aware of and comply with the obligations of this Agreement.
Exclusions from Confidential Information
Receiving Party’s obligations under this Agreement do not extend to information that: (a) is already known to Receiving Party without an obligation of confidentiality; (b) becomes publicly known through no wrongful act of Receiving Party; (c) is rightfully received from a third party without an obligation of confidentiality; or (d) is independently developed by Receiving Party without the use of Confidential Information.
Consequences of Breach
Receiving Party acknowledges that any breach of this Agreement by it would cause irreparable harm to Disclosing Party, for which monetary damages may be inadequate, and that Disclosing Party will be entitled to seek equitable relief, including injunction and specific performance, in addition to all other remedies available at law or in equity. Receiving Party shall reimburse Disclosing Party for any and all costs and expenses incurred in connection with the enforcement of this Agreement.
Governing Law and Jurisdiction
This Agreement shall be governed by and construed in accordance with the laws of [GOVERNING LAW], without giving effect to any conflict of laws principles. Any dispute arising out of or related to this Agreement shall be brought exclusively in the courts of [JURISDICTION], and each party hereby consents to the jurisdiction and venue of such courts and waives any objections to such jurisdiction and venue based on forum non conveniens, lack of personal jurisdiction, or otherwise.
This Agreement constitutes the entire agreement between the Parties and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, of the Parties with respect to the subject matter of this Agreement. This Agreement may not be amended, supplemented, or modified except in writing signed by both Parties.
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF
The Parties have executed this Agreement as of the date first above written.
What are some additional clauses I might add to a typical Non-Disclosure Agreement?
In addition to the typical clauses found in a Non-Disclosure Agreement (NDA), which generally include definitions, the scope of the agreement, exclusions, and the term of the agreement, there are several additional clauses that you might consider adding to address specific concerns or circumstances. Some possible examples include:
- Confidentiality Obligations of Third Parties: This clause would require the recipient of the confidential information to ensure that any third parties who receive the information are bound by the same confidentiality obligations as the recipient.
- Non-Solicitation: This clause would prohibit the recipient from soliciting or hiring the disclosing party’s employees or contractors for a set period of time after the agreement ends.
- Return or Destruction of Confidential Information: This clause would require the recipient to return or destroy any confidential information received from the disclosing party upon termination of the agreement.
- Governing Law: This clause would specify which state or jurisdiction’s law governs the agreement, and which courts have jurisdiction in the event of a dispute.
- Exclusions from Confidentiality: This clause would specify certain information or data that is excluded from the confidentiality obligations of the recipient, such as information that is already publicly available or information that the recipient independently develops.
- Remedies: This clause would specify the types of remedies available to the disclosing party in the event of a breach of the NDA, such as injunctive relief, monetary damages, or specific performance.
- Term Extension: This clause would provide for an extension of the term of the NDA beyond its initial expiration date, subject to the agreement of both parties.
It’s important to remember that the specific clauses you include in an NDA will depend on the nature of the confidential information and the specific circumstances of the agreement. Consulting with a lawyer can help ensure that your NDA is tailored to your specific needs and provides adequate protection for your confidential information.