Non-Disclosure Agreement Template

Table of Contents

• What Is a Non-Disclosure Agreement?
• What Are the Types of Non-Disclosure Agreements?
• How Do Non-Disclosure Agreements Vary By State?
• What Should an NDA Include?
• How to Create a Non-Disclosure Agreement
• Common Concerns About NDAs
• How to Enforce an NDA
• How Legal Templates Can Help With NDAs
• Sample Non-Disclosure Agreement
• Frequently Asked Questions

What Is a Non-Disclosure Agreement?

A non-disclosure agreement is a legal contract in which parties agree not to reveal sensitive information. It protects both parties by describing the information that will remain secret and explains how long the parties must keep their promises. This contract also describes the recourse parties can take if either reveals the information.

An NDA can be mutual and limit disclosures between both parties. It can also be unilateral and only limit disclosures by one party. Parties can tailor NDAs to cover almost any type of information-sharing situation.

Key Purposes of an NDA

The key purpose of an NDA is to secure privileged information shared between parties. This document requires parties to maintain secrecy so that they can collaborate without compromising their information. It builds trust and transparency, ensuring no party leaves out information for fear of unauthorized disclosure.

Examples

An NDA is useful in any situation where parties exchange confidential or sensitive information. Here are some specific instances when they’d use this document:

• Business negotiations: To protect sensitive details, like financial projections, during mergers.
• Hiring practices: To prevent employees or contractors from sharing proprietary company information, like client accounts.
• Business collaborations: To safeguard shared interests and establish clear boundaries in joint projects or partnerships.
• Trade secrets: To ensure confidentiality of proprietary methods or product designs and secure intellectual property.

Is an NDA Legally Binding & Enforceable?

Yes, an NDA can be legally binding and enforceable. For it to be upheld in court, it must meet certain requirements. For example, it will only be valid if it:

• includes a clear description of the confidential information
• lasts for a reasonable period
• complies with relevant local laws and public policy

It’s important for each party to sign the agreement willingly and have equal bargaining power. Otherwise, a court could deem the NDA invalid.

What Are the Types of Non-Disclosure Agreements?

Each non-disclosure agreement has language that is specific to the kind of information receiving protection. Some NDAs can be tailored for different or unusual needs. You can fill out each document in our editor and ensure it aligns with your needs. This lets you take direct charge of your legal planning.

Main Types of NDAs

There are three main types of NDAs. Basic or standard NDAs are non-specific to the information and the parties. These documents use boilerplate language and may refer to all information that parties share. Mutual NDAs are binding on both parties, while unilateral NDAs are binding on the receiving party. Mutual NDAs are common in business ventures and partnerships, while unilateral NDAs are common in employment agreements.

Employment & Contractor NDAs

Employment and contractor NDAs include volunteer, intern, and interview NDAs. These kinds of NDAs are usually unilateral and may be short-term in duration.

Business & Financial NDAs

Business and financial NDAs include NDAs for financial negotiations, business sales, and mergers. They encourage information-sharing so companies can facilitate their discussions.

Real Estate NDAs

Real estate NDAs may include landlord/tenant NDAs, buyer agreements, and commercial real estate agreements. These documents ensure that parties can share their details without compromising their interests.

Industry-Specific NDAs

Businesses may attach industry-specific NDAs to other contracts as riders. These riders can reinforce confidentiality clauses for specific ventures. When businesses address the specific risks of their industry, they can encourage collaboration in competitive environments.

How Do Non-Disclosure Agreements Vary By State?

NDAs can vary by state because each state has its own laws governing confidentiality. You can create a binding NDA by using a document tailored to your state’s legal requirements. Our state-specific NDA forms include the necessary provisions so you can use the correct document for your area. With our document editor, you can select your state to customize your NDA and ensure it complies with the applicable legal requirements.

What Should an NDA Include?

Including the right elements in your NDA is essential for ensuring its enforceability and protecting your sensitive information. If you use our NDA template and document builder, you can rest assured that all the key elements are present. If you decide to write your own, you can ensure that you include at least the following foundational elements.

Parties Involved

Include the names of the disclosing and receiving parties. The disclosing party shares data, while the receiving party accepts it.

Naming all parties can help avoid potential loopholes that may make the NDA unenforceable. For example, failing to include a contractor’s name in a company’s NDA may mean the contractor won’t have to uphold confidentiality.

Definition of Confidential Information

When you define the confidential information that an NDA will protect, you can ensure the document is specific enough to enforce later.

Be as specific as possible when listing the types of information you consider confidential. If possible, avoid generic terms like “all information.” Instead, specify whether confidentiality applies to written, verbal, electronic, or visual information. You may even provide a few examples of covered information to enhance clarity.

Obligations of the Receiving Party

The receiving party must know what they can do with the confidential information. When you outline their obligations, you can set clear expectations for information handling.

Be sure to state what permissions the receiving party has and doesn’t have. For example, you may specify that they can review the information for a partnership but can’t use it for personal gain.

Duration of the Agreement

NDAs with end dates are more likely to be enforced by courts, as they are often fairer and less restrictive.

Evaluate the type of information you’re sharing to determine a reasonable end date. It may be reasonable for a trade secret NDA to expire within five to 10 years. But it may also be reasonable for a product development NDA to expire within one to three years. Ensure that your NDA aligns with industry standards to increase its enforceability.

Remedies for Breach

Remedies for breach are what the parties can do if anyone violates the agreement. You may want to list specific options, like mediation or arbitration. Outlining the remedies in advance can help deter breaches in the first place. It can also protect the disclosing party’s interests if an unauthorized disclosure happens.

Exclusions

NDAs do not apply to public knowledge or independently developed information. Furthermore, they don’t protect information the recipient already had permission to disclose.

These exclusions prevent an NDA from being too broad or restrictive, giving a court more grounds to uphold the agreement. If you want to exclude other items from an NDA and they align with your business goals, you can list them in your document.

How to Create a Non-Disclosure Agreement

It’s essential to get your NDA just right. When written thoughtfully, it can ensure private details are only disclosed to those you intend to share them with.

1. Choose the Right Type of NDA

Start by choosing the right NDA for your situation. If you’re in a specialized industry, you can ensure that you choose the right agreement format.

You can also consider who’s sharing information, as this detail can dictate the type of NDA you choose. A mutual NDA is useful when both parties share confidential information, such as during a partnership. Alternatively, a unilateral NDA is for when only one party discloses sensitive information.

2. Define the Scope of Confidential Information

Confidential information must be clearly defined, but you don’t need to detail every document and piece of work. For example, you might be able to describe “confidential information” as “all documents labeled ‘Confidential.'”

3. Specify Exclusions

Specify widely accepted exceptions to ensure your NDA isn’t too restrictive. For example, suppose the receiving party worked with you on a previous project. Any knowledge they gained from the previous project would be excluded from the current NDA.

You can also specify any non-standard exclusions that you want to include. For example, an employee may gain general knowledge when working for you. You may clarify they can use this knowledge elsewhere if it’s not tied to specific proprietary details.

4. Finalize Terms & Obtain Signatures

Everyone must agree on all terms and sign the final NDA before it is a legal contract. It’s a good idea to have a legal professional review your final NDA before you sign it.

Before signing, you may choose to incorporate additional clauses. For example, you may decide to include a non-compete clause. This kind of clause bans the recipient from working with competitors. You must write the clause to keep it reasonable and fair to all parties. For example, your non-compete clause must not be indefinite. It must also only apply to specific areas where your business has interests.

Common Concerns About NDAs

NDAs are essential in protecting sensitive details, but some people have questions about their terms and enforcement. Understanding common concerns can help you clarify an NDA’s purpose and ensure it serves your needs.

What if the Other Party Breaches the NDA?

If the other party breaches the NDA by revealing confidential information, you can take legal action. The consequences for the offending party vary depending on the remedies available in the contract and the severity of the breach.

In some cases, the receiving party may need to pay the disclosing party monetary damages and legal costs incurred when trying to enforce the NDA. In other cases, a court may issue an injunction to force the recipient to stop sharing the information.

Still, a breach can lead to the end of the parties’ relationship.

Are NDAs Enforceable Everywhere?

No, NDAs are not enforceable everywhere. Although most NDAs are enforceable, some states will not enforce an NDA that prevents employees from talking about workplace discrimination or revealing discrimination settlement amounts.

Washington State passed the Silenced No More Act in 2022, which makes it unlawful for employers to mandate or request NDAs that restrict employees’ rights to talk about breaches of public policy at their workplace.

Check your state’s laws before writing an NDA to ensure its provisions will be enforceable.

Can NDAs Be Challenged in Court?

Yes, NDAs can be challenged in court for the following reasons:

• Coercion: One party signed the NDA by force or without fully knowing its terms.
• Unreasonable duration: The NDA lasts for an unrealistic period.
• Violation of public policy: The NDA goes against public policy, like restricting the reporting of health and safety risks.
• No consideration: The NDA didn’t give the receiving party anything of value when they signed the NDA.

You can prevent challenges in court by ensuring your NDA complies with legal requirements. It should clearly define confidential information, set reasonable terms, and avoid clauses that conflict with public policy.

How to Enforce an NDA

Once you have your non-disclosure agreement in place, you can enforce it if there is a breach. What steps should you take if the receiving party has breached an NDA?

1. Identify the Breach

An NDA is breached if someone discloses information they agreed not to divulge. You may learn of the breach when this information appears in public or if a competitor has access to your data.

You may need to conduct an internal investigation or audit to learn the source of the breach. If the NDA is mutual, review communications with the other party to identify where the breach might have begun.

2. Send a Cease & Desist Letter

Once you identify the source of the breach, you should send a cease and desist letter to the party that breached the agreement. The letter should outline the nature of the breach, identify the clause of the contract that prohibits the conduct, and demand the party stop the behavior. The letter should include a deadline for compliance or return of property.

3. Seek Legal Remedies

A cease and desist letter may solve the problem without further action. If not, you may need to seek legal remedies through the court. You can request different types of relief, depending on the nature of the harm caused by the breach. For example, injunctive relief can require the other party to cease their behavior. Monetary relief can require the offending party to pay monetary damages for lost profits.

You can seek relief via one of the three main forms of enforcement. Many companies choose all three, progressing through the steps if one is not effective:

• Mediation: A third party facilitates discussions and helps both sides reach a mutual decision.
• Arbitration: A third party listens to both sides and makes a legally binding resolution.
• Lawsuit: A formal legal process where a case goes to court, and a judge makes a final, legally binding decision based on the facts and law.

How Legal Templates Can Help With NDAs

Using Legal Templates’ NDA document editor means your NDA will meet all legal guidelines and state-specific requirements. We provide easy-to-use templates that meet a range of NDA needs. All you do is fill in the details, print, and sign.

When you need to customize your NDA, our document editor gives you the flexibility to make changes that meet all your legal needs. This way, your non-disclosure agreement protects your company and proprietary information seamlessly.

Sample Non-Disclosure Agreement

Below, you can view a sample non-disclosure agreement template. Then, you can use our document builder to create your own and edit it to match any business need you have.

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Frequently Asked Questions