What Is a Non-Disclosure Agreement?
A Non-Disclosure Agreement is a legally binding contract prepared to describe the conditions of the confidential arrangement approved by two parties.
- Nondisclosure Agreement;
- Proprietary Information Agreement;
- Confidentiality Agreement.
Whether you have consulted with a prospective investor on behalf of your business, hired an employee who will be allowed to work with sensitive documents, or told a purchaser or tenant private details related to your real property, you may offer them to sign an NDA and avoid the release of the information that has significant value for your company or you personally to third parties that may take unfair advantage of it.
Non-Disclosure Agreement Templates by State
Once you decided an NDA is inevitable to guarantee your proprietary information is kept safe, it is time to negotiate the terms of the contract with the party authorized to work with it alongside you or individually. The first step you have to make is to choose the state-specific document whether you are going to draft a short Non-Disclosure Agreement or create a comprehensive contract to cover all the details that become known to one of the parties or both of them during their collaboration. Select the template suitable for your location to confirm you are adhering to local regulations that make your agreement legally enforceable.
Non-Disclosure Agreement Types
- Non-Disclosure Agreement Template. You may use this simple Non-Disclosure Agreement to determine what ideas and secrets you have shared with your counterpart have to remain secret;
- Business Non-Disclosure Agreement Template. Offer an independent contractor, consultant, or lawyer to sign this contract - they will be obliged to keep the information they have obtained access to secret under threat of civil liability;
- Business Plan Non-Disclosure Agreement Template. If you have just discovered or already developed an effective way to manage your organization, determined the objectives of your business, and outlined the goods and services your company will focus on, protect this information from being disclosed by investors, consultants, or employees;
- A Mutual Non-Disclosure Agreement Template typically establishes the mutual obligation of two organizations to refrain from releasing the information they have found out during their collaborative work - a two-way contract will ensure the particulars of your partnerships are not known to any third parties;
- A Real Estate Non-Disclosure Agreement Template is needed during the negotiations to sell or rent out commercial or residential property - the seller or landlord may disclose the information about the real estate to the buyer or tenant to persuade them to sign the document;
- Employee Non-Disclosure Agreement Template. You should propose the signing of this document to the employee before their first work day or during the termination of the employment agreement - the person identified in the Non-Disclosure Agreement for Employees will not disclose the information they have learned working for you to other entities or people, notably your competitors.
Unilateral NDA Vs Mutual NDA
One of the essential elements that must be included in the text of the Non-Disclosure Agreement is the indication of whether both parties are under the obligation to keep the information they have learned during their cooperation confidential or only one party has to do it - the former contract implies the NDA is mutual while the latter is unilateral.
Make sure the responsibility to keep the details private applies to both individuals or companies that sign the papers if you had a mutually beneficial business relationship - for instance, a partnership or merger. In all other cases, a standard NDA can be unilateral since only one party is getting access to trade secrets, bank statements, internal records, etc. Note that you should anticipate a possible dispute taking place when your collaboration is over or terminated before the contract expires so discuss the non-disclosure rules you will follow once you start working with the other party.
How Long Does a Non-Disclosure Agreement Last?
While it is in the best interest of the business to sign a Non-Disclosure Agreement that lasts as long as the local laws permit it, realistically it is hard to enforce the other party to keep the sensitive information secret for longer than four or five years.
Besides, most trade secrets, inventions, technologies, business plans, and strategies shared during the time you have worked together have no real value in various industries after several years so it makes no sense to bind the employee, contractor, or legal expert to the terms of this contract. Yet, there is no one-size-fits-all solution - you should consider all the potential risks and prevent the party that was granted access to proprietary information from suffering an economic or reputational loss - insist on a long-term or indefinite agreement and specify the duration in writing to safeguard your company.
What Happens When You Break a Non-Disclosure Agreement?
Usually, the consequences for violating the terms of the NDA are listed in the text of the document - at a minimum, there should be a reference to the law the parties will refer to when seeking compensation for the contract breach.
Even if you failed to include this provision in your agreement, the courts will accept the claim filed against the breaching party - in the majority of cases, you will be demanded to pay damages and cover the legal fees the plaintiff has incurred. Moreover, if the case is brought to public attention, you are risking your reputation especially when it comes to competitive industries and prominent companies that value public image - do not jeopardize your chances to be employed or invited to participate in an important project just because you decided to release sensitive information that does not belong to you.
Related Forms and Templates:
Use this agreement to protect different types of confidential information (know-how, trade secrets, software, technical information, and other types of proprietary data) from disclosure by an employee.
This is a legal contract that prevents parties to an agreement from disclosing certain information that is deemed to be confidential.
This is a legal document that creates confidentiality between all involved parties, ensuring that the agreed information in the contract is not disclosed.
If you are selling a real estate property and wish to keep the information about the property private, you can request the buyer complete this type of template.
This type of template gives permission for an individual to openly discuss and show another party their business plan without the worry that this party will use this information for their own personal gain.
Individuals that reside in the state of Alabama may use this type of template as a formal agreement signed by two parties, with one or both of them promising not to disclose confidential information they have learned during their collaborative work or professional relationship.
This type of template refers to the enforceable contract signed by the parties to outline the particulars of their confidential relationship in the state of Alaska.
This type of template is a legal instrument that is often used in competitive industries to ensure that confidential and proprietary information is not leaked to any third parties.
This type of template may be used in the state of Arkansas if you want to prevent the disclosure of a trade secret, unique marketing strategies, or manufacturing processes developed within your company.
Individuals that resided in the state of California may use this type of legal contract to outline the confidential information shared between parties that have a professional relationship and decide to restrict the use of these details to avoid them being known to third parties.
If you live in the state of Colorado and you are the owner of confidential information that you want to make sure the person or organization you disclosed it to does not share it with any third party, this type of form may be used to provide security to all of the involved parties.
Residence of Connecticut may use this template as a written contract that is signed by two parties (individuals or entities) to forbid the sharing of confidential details these parties have shared.
An individual may draft this type of agreement in the state of Delaware to describe the particulars of the confidential relationship between the person that owns the rights to a trade secret, formula, or manufacturing procedure and the individual that receives this information.
This is a formal contract residents of Florida may use that covers the details of a confidential relationship created between the owner of this information and its recipient.
This is a legal instrument used in Georgia to outline the terms and conditions determined by two parties that give their consent not to disclose information they have learned while working together.
This type of template can be used in the state of Hawaii if you want to protect your proprietary information, trade secrets, formulas, or manufacturing procedures.
Residents of Idaho may use this type of template as a legally enforceable document that describes the particulars of the confidential relationship between two parties (individuals or organizations)
This is a formal contract residents of Illinois may use that covers the details of a confidential relationship created between the owner of this information and its recipient.
This type of template can be used in the state of Indiana if you are looking for the surest way to safeguard the sensitive information you share with your business partners, investors, and clients.
This is a formal contract residents of Kansas may use that covers the details of a confidential relationship created between the owner of this information and its recipient.
This type of template is used in the state of Kentucky and acts as a written contract signed between two parties: one of them owns proprietary information and the other gets access to it and promises to keep it confidential.
This is a formal contract residents of Louisiana may use that covers the details of a confidential relationship created between the owner of this information and its recipient.
This is a typed or handwritten document used in the state of Maine that establishes the terms of a confidential relationship between different parties.
This type of template may be used in the state of Maryland if you are thinking about protecting the proprietary information of your business or discovering and developing previously unknown data with your current and former employees.
Residents of Massachusetts may use this type of template as a legal instrument that lists the terms of a confidential relationship created between the owner of the sensitive information and the person or company that received it.
This is a legally enforceable contract used in Michigan that is prepared and signed by the owner of sensitive information and the individual or company they chose to share this information with.
Individuals that reside in the state of Minnesota may use this type of formal contract to illustrate the terms of a confidential relationship negotiated by the parties: one of them discloses sensitive information they own and the other promises not to share it with third parties.
If you represent the interests of a business in the state of Mississippi that wants to keep the sensitive information in its possession private, especially from market competitors, you can offer the person or company that was granted access to this data to sign this type of template.
Residents of Missouri may use this legally binding contract that describes the terms and conditions of the confidential relationship between two parties - the owner of the sensitive information makes the recipient of these details promise they will not disclose them to any third party.
This is a formal contract residents of Montana may use that covers the details of a confidential relationship created between the owner of this information and its recipient.
This type of template can be used by residents of Nebraska and refers to a legally binding document that records the details of a confidential relationship established between the disclosing party and the receiving party
This is a formal contract residents of Nevada may use that covers the details of a confidential relationship created between the owner of this information and its recipient.
Consider preparing this type of template if you are a resident of New Hampshire and want to protect sensitive information owned by your company.
This type of template refers to an enforceable contract that outlines the particulars of the confidential relationship established between two parties in the state of New Jersey.
This is a document prepared and signed by the parties that want to determine the use of confidential information in the state of New Mexico.
This is a formal contract residents of New York may use that covers the details of a confidential relationship created between the owner of this information and its recipient.
Compose and sign this type of agreement in the state of North Carolina if you are formalizing a deal with a new business partner, hiring employees, or working on a project with a customer if these actions are related to the disclosure of confidential information.
This is a formal contract residents of North Dakota may use that covers the details of a confidential relationship created between the owner of this information and its recipient.
This is a document prepared and signed by parties that want to determine the use of confidential information in the state of Ohio.