Prepared for:
[Client.FirstName][Client.LastName]
[Client.Company]
Created by:
[Sender.FirstName][Sender.LastName]
[Sender.Company]
A non-disclosure agreement (NDA) is a written arrangement between two and more parties not to disclose the sensitive information they shared with one another and defined as confidential information. NDA agreement could be a standalone contract and as a separate clause of different types of agreements, like employment contract or joint venture agreement. Non-disclosure agreements are required for different companies or individuals that decide to run business together. It is also functional for any business that starts negotiating with third-party companies. If you are looking for extra confidentiality of any sensitive information to spread amongst signing parties, then a non-disclosure agreement will serve you great. This contract legally binds assigned members and eliminates the risk of sensitive data being lost or given to competitors.
The purpose of a non-disclosure agreement is establishing a secure legal shield for signing parties to protect their data, intellectual property, and ideas from being shared with unwanted third parties or stolen by competitors. NDA violation usually results in significant financial and reputational losses, consequent fines, unpleasant lawsuits, up to criminal charges. There are three common cases of using a non-disclosure agreement:
Hiring a subcontractor. In this case you provide partners with the information necessary to execute the job they were contracted for and ensure with an NDA that this information is secure and safe.
Employee recruiting. Signing a non-disclosure agreement with the personnel protects your clients data and business knowhow from being thieved and shared with your rivals.
Joint business project. While engaging in a new venture both businesses and individuals bring to the table their professional expertise, vision, ideas, and proprietary solutions. NDA assures that none of these would be used or stolen by either parties after completion or termination of the project.
Thus, a non-disclosure contract is applied to ensure the trustworthiness of signing parties, making them responsible for spreading the shared sensitive information to outside third parties.
The consequences of breaking a non-disclosure agreement are largely predetermined by its content and respective consequences of disclosure. Violating an NDA doesn’t equal committing a crime, but the guilty party will have to cover at least financial consequences for this action. However, in the worst case scenario breaking a non-disclosure agreement could result in criminal charges. An NDA, even though it has a civil-contract nature, will support the lawsuit of the adversely affected party.
The validity term of a non-disclosure contract isn’t set by default and varies, depending on signing parities’ particular needs. Usually, engaged parties agree to preserve the confidentiality of the shared data within one and up to ten years. It’s a common practice to keep an NDA effective for several years after the parties discontinued common business relations. However, there are cases when the life of a contract is literally eternal — it won’t expire no matter what. This is predetermined by the company policies and how classified the files to share between the parties are.
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This Non-Disclosure Agreement (this “Agreement” or this “Non-Disclosure Agreement”) by and between [Sender.Company], a [Sender.State][type of legal entity], having its principal place of business at [Sender.StreetAddress] (the “Disclosing Party”), and [Client.Company], a [Client.State][type of legal entity], having its principal place of business at [Client.StreetAddress] (the “Receiving Party”) who agrees to be bound by this Agreement.
WHEREAS, through this Non-Disclosure Agreement, the Disclosing Party and Receiving Party have entered into a relationship by which the Receiving Party may be exposed to certain confidential information of the Disclosing Party, in which it has an interest in protecting.
NOW, THEREFORE, in consideration of the mutual covenants and promises made by the parties hereto, [Sender.Company] and [Client.Company](individually, each a “Party” and collectively, the “Parties”) covenant and agree as follows:
1. DEFINITIONS
For the purposes of this Non-Disclosure Agreement, the following terms are defined as follows:
a. “Trade Secret” means all information possessed by or developed for Disclosing Party to which all the following apply: (i) the information derives independent economic value from not being generally known and (ii) Disclosing Party takes reasonable precautions to prevent such information from being disclosed to the public.
b. “Confidential Information” means information, to the extent it is not a Trade Secret, which is possessed by Disclosing Party and which relates to Disclosing Party, including, without limitation, for example: business plans, strategies, existing or proposed bids, costs, technical developments, intellectual property, proprietary information, financial or business projections, investments, marketing plans, or training information, materials, and examples of confidential information.
2. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
Except as required to further the relationship between Disclosing Party and Receiving Party or as expressly authorized in writing on behalf of Disclosing Party, Receiving Party shall not disclose, directly or indirectly, any Confidential Information during the period of his/her relationship with Disclosing Party or anytime after the termination of such relationship.
3. TRADE SECRETS
Throughout the duration of this Non-Disclosure Agreement and Receiving Party‘s business relationship with the Disclosing Party and anytime after the termination of such relationship, the Receiving Party shall do what is reasonably necessary to prevent unauthorized disclosure of the Disclosing Party‘s Trade Secrets. Further, after the termination of any such relationship, the Receiving Party shall not use or disclose Disclosing Party‘s Trade Secrets as long as they remain Trade Secrets.
4. EXCEPTIONS
The provisions of Sections 2 and 3 above will not be deemed to prohibit any disclosure that is required by law or court order, however the Receiving Party agrees to provide the Disclosing Party with reasonable prior notice and an opportunity to contest or minimize such disclosure.
5. RETURN OF DOCUMENTS
Immediately upon termination of the relationship between Disclosing Party and Receiving Party, Receiving Party shall return to Disclosing Party any documents pertaining to the Confidential Information or Trade Secrets which are in Receiving Party‘s possession.
6. REPRESENTATIVE ACKNOWLEDGMENTS
Receiving Party acknowledges that: (i) this Agreement has been specifically bargained between the parties and reviewed by Receiving Party, (ii) Receiving Party has had an opportunity to obtain legal counsel to review this Agreement, and (iii) the covenants made by and duties imposed upon Receiving Party hereby are fair, reasonable, and minimally necessary to protect the legitimate business interests of Disclosing Party, (iv) such covenants and duties will not place an undue burden upon Receiving Party‘s livelihood in the event of termination of Receiving Party’s business relationship with Disclosing Party and the strict enforcement of the covenants contained herein, and (v) any breach of this Agreement will cause substantial and irreparable harm to Disclosing Party for which money damages would be an inadequate remedy.
7. VENUE
This Non-Disclosure Agreement and the interpretation of the terms herein shall be governed by and construed in accordance with the laws of the State of [Sender.State]. The Parties irrevocably submit to the exclusive jurisdiction of the federal and state courts located in [Sender.County], [Sender.State]. IN WITNESS WHEREOF, each of the Parties has executed this Non-Disclosure Agreement, both Parties by its duly authorized officer, as of the day and year set forth below.
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This NDA Agreement Template can be used between a company and a vendor or subcontractor to establish confidentiality between the two parties.
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