non disclosure agreement business plan

Understanding Business Plan Non-Disclosure Agreements (NDA)

Written by Dave Lavinsky

When it comes to starting or expanding a business, creating a comprehensive business plan is crucial. A business plan is a written document that outlines the goals, strategies, financial projections, and other key details of a business venture. However, sharing sensitive business information, such as trade secrets, proprietary methods, or financial data, with potential investors, partners, or employees can pose risks. That’s where a Business Plan Non-Disclosure Agreement (NDA) comes into play.

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This article will explain to you what an NDA is and provide a sample NDA. However, before discussing that, it is important to note that most investors and lenders will not sign an NDA. So,  you’ll need to keep that in mind.

Typically on the cover of a business plan , we’ll include the following:

CONFIDENTIAL 

This document includes confidential and proprietary information of and regarding [Your Company Name].  This document is provided for informational purposes only.  You may not use this document except for informational purposes, and you may not reproduce this document in whole or in part, or divulge any of its contents without the prior written consent of [Company Name]. By accepting this document, you agree to be bound by these restrictions and limitations.

While such a statement is far from 100% legal protection, it may provide dissuade readers from divulging information about your business plan and company.

What is a Business Plan Non-Disclosure Agreement

A Business Plan Non-Disclosure Agreement, also known as a Confidentiality Agreement or NDA, is a legal contract that aims to protect the confidential and proprietary information shared in the plan from being disclosed or used by third parties without authorization. It establishes a legally binding agreement between the parties involved, and it helps to ensure that the sensitive information shared in the business plan remains confidential and is not misused.

The main purpose of a Business Plan NDA is to safeguard the intellectual property and confidential information of a business. This may include, but is not limited to:

• business strategies
• financial projections
• marketing plans
• customer lists
• trade secrets
• proprietary technology
• other sensitive information that gives a business a competitive advantage 

By signing a Business Plan NDA, the recipient agrees to keep the information confidential and not to disclose, use, or exploit it for any purpose other than the intended business relationship.

What Key Elements are included in a Business Plan Non-Disclosure Agreement

A well-drafted Business Plan NDA typically includes the following key elements:

Definition of Confidential Information: Clearly specifying what information is considered confidential and protected under the agreement. This may include a broad or specific definition of confidential information, depending on the needs of the parties involved.

Obligations of the Receiving Party: Outlining the responsibilities of the recipient of the confidential information, including the duty to maintain confidentiality, restrictions on disclosure and use, and the requirement to return or destroy the information after the business relationship ends.

Permitted Disclosures: Identifying situations where the recipient may be allowed to disclose the confidential information, such as to legal or financial advisors, or as required by law.

Term and Termination: Establishing the duration of the NDA and specifying the conditions under which it can be terminated, such as by mutual agreement or by breach of the agreement.

Remedies for Breach: Outlining the consequences of breaching the NDA, such as damages, injunctive relief, or other remedies available under the law.

Governing Law and Jurisdiction: Specifying the applicable law and jurisdiction that will govern any disputes arising from the NDA.

Sample Business Plan Non-Disclosure Agreement:

Below is a sample business plan non-disclosure agreement (NDA). Since we are not lawyers, we recommend that have a lawyer review any NDAs you plan on using.

[Your Company Name]

[Recipient Name]

This Non-Disclosure Agreement (the “Agreement”) is made and entered into as of [Date] by and between Your Company Name (“Disclosing Party”) and Recipient Name (“Receiving Party”).

Definition of Confidential Information: The term “Confidential Information” shall mean any and all information disclosed by the Disclosing Party to the Receiving Party, including but not limited to business strategies, financial projections, marketing plans , customer lists, trade secrets, proprietary technology, and any other information that is not publicly available.

Obligations of the Receiving Party: The Receiving Party shall use the Confidential Information solely for the purpose of evaluating the possibility of a business relationship between the parties and shall not disclose or use the Confidential Information for any other purpose without the prior written consent of the Disclosing Party.

Permitted Disclosures: The Receiving Party may disclose the Confidential Information to its employees or advisors on a need-to-know basis, provided that such employees or advisors are bound by similar confidentiality obligations.

Term and Termination: This Agreement shall remain in effect for a period of [insert duration, e.g., 2 years] from the date of execution, unless terminated earlier by mutual written agreement or by breach of this Agreement. Upon termination, the Receiving Party shall promptly return or destroy all Confidential Information and provide written certification of such return or destruction to the Disclosing Party.

Remedies for Breach: In the event of a breach of this Agreement, the Disclosing Party shall be entitled to seek equitable relief, including but not limited to injunctive relief, as well as damages for any losses incurred as a result of the breach.

Governing Law and Jurisdiction: This Agreement shall be governed by and construed in accordance with the laws of [insert applicable jurisdiction such as “California”]. Any disputes arising out of or in connection with this Agreement shall be resolved exclusively by the courts of [insert applicable jurisdiction].

Entire Agreement: This Agreement contains the entire understanding between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether oral or written, relating to the Confidential Information.

Binding Effect: This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

By signing below, the parties acknowledge and agree to the terms of this Agreement:

[insert name, signature and date lines]

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A business plan non-disclosure agreement (NDA) is a form used by businesses to permit a 3rd party (be it a person or company) to view their business plan without the fear of the 3rd party sharing the contents of their plan with other entities. Business plans contain a massive amount of information regarding the disclosing company. The document typically includes financials, pricing, short and long-term strategies, goals, competitive advantages, and information on their customers, to name a few. In short, a company’s business plan going public could be severely damaging to their ability to compete in the market.

A business may share their business plan to those interested in purchasing their company, to investors (for the purpose of receiving funding), bankers, and lawyers, to name a few. While an NDA can go a long way in preventing their plan from going leaked to other parties, nothing is ever 100% secure. A company should only go about sharing their business plan if there is a necessary reason for doing so.

How to Write

Step 1 – Download

Save the template in PDF , WORD , or RTF .

Step 2 – Identifying the Parties

On the first line of the document, write the name of the company (or individual) sharing the business plan. If a company, the full legal name of the entity should be listed. On the next line, enter the name of the entity receiving permission to view the business plan. As before, this can be a person or a business.

Step 3 – Applicable Law

Enter the names of the county and state in which the NDA will be legally covered.

Step 4 – Signature

The only signature required for the form is that of the 3rd party. In addition to their signature, they will need to record the date in which they signed the document followed by their printed name.

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Non-Disclosure Agreement (NDA) Template

Use our Non-Disclosure Agreement to protect your confidential information. Begin by selecting the relationship between the parties.

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Updated October 27, 2023 Written by Josh Sainsbury | Reviewed by Brooke Davis

A Non-Disclosure Agreement (NDA) , also known as a confidentiality agreement, is a contract between two parties where one shares sensitive information and the other party promises to keep it confidential. Confidential information is often sensitive, technical, commercial, or valuable in nature (e.g., trade secrets or proprietary information).

Both parties sign the Confidentiality Agreement, creating a binding contract to keep the information secret. Be sure you understand how to write an NDA before drafting your own.

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What Is the Purpose of a Non-Disclosure Agreement?

How to write a non-disclosure agreement, sample non-disclosure agreement, frequently asked questions.

A Non-Disclosure Agreement aims to prevent confidential information from being publicly disclosed or used by any parties you share information with.

A signed NDA sets the legal framework to protect intellectual property and information from being stolen, sold, or shared with third parties, such as business competitors.

An NDA is typically used to:

• To protect sensitive information – If you or your company need to protect sensitive data, you can use an NDA, so participants are legally bound not to divulge or release the information to other parties.
• Protect patent rights – If you intend to share trade secrets, you must take reasonable steps to protect their confidentiality. An NDA is an appropriate step.
• Outline what information is confidential – An NDA classifies exclusive and personal information to avoid confusion .

Examples of situations when a company uses an NDA:

• In-depth business discussions
• Hiring employees, freelancers, or contractors
• Working with potential investors
• Supplementing other agreements

Here is a walkthrough on how to create and fill out an NDA, what are the standard clauses you should include, and what they mean:

Step 1 – Disclosing and Receiving Parties

Start your NDA by establishing the “ Parties ” to the agreement. The “ Disclosing Party ” is the individual or entity sharing information. At the same time, the “ Receiving Party ” is the individual or entity receiving information.

Confidential information has been shared in a mutual NDA (a bilateral NDA). In this agreement, both parties serve as the Disclosing and Receiving Parties.

Here’s an example of how to start an NDA and establish the Parties to the agreement. Notice that the sample NDA clause also specifies what transaction or relationship the NDA relates to:

Step 2 – Confidential Information

After the Parties have been established, specify what the Non-Disclosure Agreement protects confidential information.

Common examples of NDA-protected confidential information include:

Trade secrets

• Special formulas
• Instruments
• Software development
• Technical designs
• Customer lists
• Patent details

Business Ventures

• Affiliate deals
• Partnerships
• Real Estate
• Consultations
• Advertising and marketing
• Pricing structures
• Business and financial records

Creative Endeavors

• Documentary, TV, film, and news production
• Illustrations, graphic design, and drawings
• Inventions, prototypes, or product samples
• Visitor or factory tours
• Bachelor or bachelorette parties
• Volunteering
• Celebrity meet-and-greets
• House tours
• Original artwork

These are only a few examples of the types of information you wish to keep confidential under the protection of your NDA. Your agreement can list as many or as few confidential information as needed. Still, it would help if you were specific about what information the Receiving Party cannot disclose.

Being specific about what your NDA protects information will help it stand up in court in a legal dispute.

Step 3 – Exclusions from Confidential Information

An “ Exclusions ” clause defines what information the NDA does not protect.

Information that a Non-Disclosure Agreement can’t protect includes:

• information already in the public domain
• information the other party already has access to before the NDA
• information that is independently developed or discovered by the recipient
• information that the Disclosing Party has authorized the Receiving Party to share with the prior written consent

Read More: Understanding Confidential Information in NDAs

Oral information can be deemed confidential if confirmed in writing within a specific time frame after being disclosed.

Here’s an example of what your Exclusions clause should look like:

Step 4 – Non-Disclosure Obligations

The bulk of your NDA will comprise Non-Disclosure Obligations , which outline the Receiving Party’s obligations to the Disclosing Party’s information.

Rather than being a single clause, this section will likely comprise multiple clauses that detail various obligations.

This section will start with a clause like in the example below, which states the general obligation of the Receiving Party to keep the confidential information quiet.

Depending on your needs, you can add additional clauses to this section of your NDA. Here are some other provisions you may choose to include in your Non-Disclosure Obligations section:

1. Non-Disclosure of Transaction : the Receiving Party promises not to let others know that:

• The Disclosing Party has shared or used Confidential Information.
• A transaction is being discussed or negotiated.
• A transaction has taken place, including the details of the relationship.

2. Non-Solicitation : either party may prevent the other from soliciting or offering employment to the other party’s employees or diverting business from the other party.

3. Non-compete : Parties agree not to engage in business activities directly competing with the other party. Many companies have partners and employees sign NDAs and non-compete agreements separately.

4. Non-Circumvention : if the Disclosing Party shares business contacts, a non-circumvention clause prevents the Receiving Party from bypassing the agreement and directly doing business or engaging with those contacts.

In the NDA sample below, you can see how these clauses may look in an agreement:

You may include only a few examples of Obligation clauses in your NDA.

Step 5 – Time Frame / Termination

The NDA should explicitly state how long it remains in effect. The Time Frame includes when the promise to keep confidential information secret begins (the “ Effective Date “) and the duration in which the protected information must not be shared with others (the “ Disclosure Period “).

Usually, the Parties agree to when the term of the agreement will end (known as the “ Termination ” provision). For example, the Non-Disclosure Agreement could terminate when:

• The agreement expires
• The transaction is completed, or
• A specific period has passed.

Step 6 – Jurisdiction

The Jurisdiction clause establishes which state’s laws govern the Confidentiality Agreement. Suppose confidential information is leaked or inappropriately used by one party, and a lawsuit ensues. In that case, the laws of the agreed-upon state will apply, and any trials or hearings will occur there.

Ensure you understand state laws when writing a Non-Disclosure Agreement. Some states don’t honor certain kinds of NDA clauses. For example, California doesn’t honor non-compete clauses in most situations. Ensure your NDA template follows state laws, and you’ll avoid problems later.

Step 7 –  Signatures

Finally, your NDA needs to include the signatures of all Parties and their Representatives.

Representatives are other people (i.e., directors, officers, employees, agents, or advisors) who may share, receive, or protect the information in pursuit of the Transaction specified in the NDA.

Here’s an example of the Disclosing Party’s signature section:

Directly below this is the Receiving Party’s signature section, which is identical.

Step 8 – Additional Clauses

Every NDA will look different depending on the nature of the transaction, relationship, and information being specified. There are additional clauses you may choose to include in your Confidentiality Agreement:

• Remedies : stipulates the consequences of breaking the NDA
• No License:  provides that the NDA doesn’t give either party any patent, copyright, or ownership of the information provided.
• Severability : states that if one part of the NDA is ruled invalid in court, that part will be removed, and the rest of the agreement remains valid.
• Amendments : notes that the NDA may be amended at any time.

You don’t need a lawyer to complete an NDA agreement template, but working with an attorney can help. If you have questions about adjusting or adding to your NDA, consulting a lawyer will ensure your agreement is legally sound.

The following confidentiality agreement sample is an excellent example of how you can structure your basic NDA agreement template. You can also check out our other NDA templates for samples.

• What should an NDA include?
• NDA vs. Non Compete
• NDA vs. Confidentiality Agreement

Can I handwrite an NDA?

What should a Non-Disclosure Agreement include?

Your Non-Disclosure Agreement is applicable as long as you agree with the other party/parties involved. Typically, a standard NDA ranges from one to five years; however, depending on the information to be kept confidential, an NDA can be indefinite.

What’s the Difference Between a Non-Compete and a Non-Disclosure Agreement?

The primary difference between a non-compete and a non-disclosure agreement is the business activities they intend to restrict.

• A non-compete agreement prohibits one party from doing business that competes with the other party . For instance, it prevents one party from hiring the other’s employees and business contacts and working with competing companies.
• A non-disclosure agreement prevents one or both parties from using or leaking sensitive information learned in negotiations or business relationships.

These documents get confused because non-disclosure agreements often include a non-compete clause. Businesses bundle the non-compete clause into the non-disclosure agreement because it’s easier to sign one document than two.

What’s the Difference Between a Non-Disclosure Agreement and a Confidentiality Agreement?

There is no difference between a non-disclosure agreement (NDA) and a confidentiality agreement . Non-disclosure and confidentiality agreements protect confidential information from being shared with third parties.

In other words, these documents’ titles come down to preference because they both serve the same legal function. Some other names people use interchangeably with confidentiality and non-disclosure agreements include:

• Secrecy Agreement
• Confidential Disclosure Agreement (CDA)
• Proprietary Information Agreement (PIA)

You may see a non-disclosure or confidentiality clause in other legal documents. For example, most independent contractor agreements outline the terms of a project and include a clause stating that any information shared is confidential.

You should not handwrite an NDA. Handwritten contracts are often dismissed in court because they are messy or incomplete. Always write NDAs digitally and print them out if you need a physical copy.

Related Documents

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Business Plan Non-Disclosure Agreement (NDA) Template

The business plan non-disclosure agreement is a document that restricts any individual from divulging proprietary information that is shared through a business plan. Lets say for example, that an entrepreneur is starting a new company and would like to run their idea by a colleague or friend, the only legal way for that business plan to be kept confidential is by the 3rd party to sign a non-disclosure. If after signing the agreement the Recipient of the business plan shares the information contained in it with anyone else the entrepreneur that created the business plan would be entitled to seek damages usually resulting in a monetary gain.

How to Write

Step 1 – Download in Adobe PDF or Microsoft Word (.docx) .

Adobe PDF – Microsoft Word (.docx)

Step 2 – In the 1st paragraph write the name of the business or individual that is sharing the business plan.

Step 3 – Enter the name of the person or entity that is receiving the business plan.

Step 4 – The person or entity that received the plan must sign , print , and date on the bottom of the form. After the signature of the receiving party the agreement is complete.

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Non-Disclosure Agreement (NDA) Explained, With Pros and Cons

What Is a Non-Disclosure Agreement (NDA)?

A non-disclosure agreement (NDA) is a legally binding contract that establishes a confidential relationship between two parties: one that holds sensitive information and the other that will receive that sensitive information. The latter agrees that the information they receive won't be made available to others. An NDA may also be referred to as a confidentiality agreement.

Non-disclosure agreements are common for businesses entering into negotiations with other businesses. They allow the parties to share sensitive information without fear that it will end up in the hands of competitors. It may be called a mutual non-disclosure agreement in this case.

Key Takeaways

• An NDA acknowledges a confidential relationship between two or more parties and protects the information they share from disclosure to outsiders.
• The NDA is common before discussions between businesses about potential joint ventures.
• Employees are often required to sign NDAs to protect an employer's confidential business information.
• An NDA may also be referred to as a confidentiality agreement.
• Mutual and non-mutual agreements are two primary types of non-disclosure agreements.

Investopedia / Tara Anand

Understanding Non-Disclosure Agreements (NDAs)

The NDA serves a purpose in a variety of situations . NDAs are generally required when two companies enter into discussions about doing business together but want to protect their interests and the details of any potential deal. The language of the NDA forbids all involved from releasing information regarding any business processes or plans of the other party or parties.

Some companies also require that new employees sign NDAs if they have access to sensitive information about the company. All employees are required to sign an agreement with some companies. Only select departments or types of employees will be subject to the agreement with other firms.

NDAs may also be used before discussions take place between a company seeking funding and potential investors. The NDA is meant to prevent competitors from obtaining their trade secrets or business plans in such cases.

Many investors are reluctant to sign NDAs, however. Not only will this potentially prevent them from sourcing future deals with other companies but the agreement may be very difficult to enforce in proving wrongdoing. Most investors simply won't sign the agreement rather than be burdened by a legal contract even after declining an investment opportunity.

The information that's being protected may include a marketing strategy and sales plan, potential customers, a manufacturing process, or proprietary software. The other party may seek court action to prevent any further disclosures and may sue the offending party for monetary damages if an NDA is breached.

Types of NDAs

NDAs come in various forms, each providing for different rules and purposes.

The Mutual Agreement

Consider a situation where two businesses are discussing the possibility of partnering together. Each company may disclose information about its operations to better inform the other side of its capabilities as part of strategic discussions. Both parties often agree to not disclose information because each side often receives sensitive information in such arrangements.

The Non-Mutual Agreement

This type of agreement is also referred to as a unilateral NDA. It usually applies to new employees who have access to sensitive information about the company. The employee is the only party signing the agreement and is prevented from sharing confidential information in such cases. Only one party is bound to confidentiality because they're the only party receiving sensitive information.

The Disclosure Agreement

Individuals are increasingly asked to sign the opposite of a non-disclosure agreement. A doctor may require a patient to sign an agreement that the patient's medical details can be shared with an insurer . This provides one party with the authority to share personal information and to prevent them from being sued for doing so.

An NDA is a legally binding agreement. A violation can lead to legal penalties.

Requirements for an NDA

NDAs can be customized for any situation but six major elements are generally considered essential to any non-disclosure agreement.

Participants in the Agreement

Every non-disclosure agreement must specifically designate each party involved. The individual receiving the sensitive information can be a specific person, all employees of another specific company, or any representative of the company.

It's very important for a company to appropriately define itself in an NDA. Consider companies with complex legal structures. The company must appropriately determine which legal entity has ownership of the information. A company may simply list any legal entity under a broad ownership umbrella in many cases.

Definition of Confidential Information

An NDA must state what information is considered to be confidential and this is often among the most difficult pieces to appropriately define. A company can't simply assume that proprietary information will be understood by all. It's the company's responsibility to identify what information must not be shared.

The difficulty with defining confidential information is the process of not disclosing such information itself within the NDA. Companies may broadly assign confidentiality to a large group for this reason. A company might assess that any information disclosed from or regarding its research and development department may be confidential.

Exclusions of Confidentiality

It may just be easiest to define what's not confidential in some situations. A company might state that all information shared with an external party is to be confidential except for specific items that are determined by that company. These types of agreements intend to allow a company to catch any exceptions that would have otherwise slipped by.

Appropriate Uses of Information

A company may sometimes state that no information is confidential or it may simply limit how the external party may use the information that's been given to them. A company may be fine disclosing operating processes to another party but that party can't use the information to share with a competitor or replicate it for personal financial benefit.

Time Period

Many proprietary bits of information simply expire or become less valuable over time, especially those relating to research and development, Consider the early days of Apple iOS . Many components of the operating service were unknown and the technology was widely unknown by the market.

Much of that information is now replicated by other companies or adapted into newer technologies. What was once sensitive information may have lost its luster. Companies often define when the information is no longer confidential.

Other/Miscellaneous Provisions

NDAs can be customized to serve any need. Various industries may have differing requirements and government agencies often have more stringent requirements for keeping sensitive information private.

An NDA may also detail applicable state law or laws that apply to the agreement and which party pays attorney fees in the case of a dispute. This may also define the course of action if the agreeing party should fail to comply with the terms.

Information Protected With an NDA

Companies have endless opportunities to protect themselves with NDAs. They're generally used to protect information including but not limited to:

• Customer information: This includes major customers, major customer contact information, and customer preferences. It might also include any direct communications with customers.
• Financial information: This includes specific financial information relating to any customer or any financial information that's not required to be publicly disclosed. This type of information is often more related to cost accounting rather than financial accounting.
• Intellectual property: This includes patents, copyrights , trade secrets, technologies, and anything a company uses as a competitive advantage.
• Marketing information: This includes processes, billing policies, pricing strategies, and advertising techniques.
• Operating information: This includes employee data, supplier information, any information that's related to payroll, or any aspect of internal costs that are required to operate the company but not required to be publicly disclosed.

NDAs can't contain specific pieces of information if the information is common knowledge or already in the public domain. This includes any information that may be widely known or considered public knowledge although there can be disagreement about how this is defined. This also includes information that becomes publicly known at no fault to the recipient of the NDA and illegal activity because it's contrary to public policy.

Information that the receiver of the NDA already knows before receiving the agreement can't be included in the agreement. Information that could be determined via independent research or rightfully obtained from a third party can't be defined as confidential, either.

Many states have their own NDA requirements. You should always seek legal counsel before entering into any NDA agreement.

Advantages and Disadvantages of NDAs

The primary benefit of an NDA is that sensitive information regarding your company is kept secret. This can be anything from research and development (R&D) to possible future patents , finances, and negotiations. Signing an NDA is a way to protect private information from becoming public.

NDA agreements are also clear. They specify what can and can't be disclosed to avoid any confusion. NDAs can be created at a low cost as they're just a signed piece of paper. This is one of the most cost-effective ways to maintain private information.

NDAs also outline the consequences of disclosing prohibited information and this should prevent any leaks. NDAs are a good way to maintain comfort and trust in a relationship as well.

Make sure that confidential information and trade secrets are distinguished from each other when you're entering into a non-disclosure agreement. The latter usually has an indefinite period of confidentiality.

One of the primary disadvantages of an NDA agreement is that it starts a relationship on the idea of mistrust. This can set the tone of the relationship and may not always result in a positive one. Employee NDAs can prevent top-tier talent from joining your firm because they know they'd be limited in discussing their jobs in the future.

Asking current employees to sign NDAs when they're working on special projects might sour their experience of working for the company because they feel less trusted. NDAs can also result in potential lawsuits if breached and this would become a headache for everyone involved.

Information is kept private

Clarity on what information can and cannot be shared

Low cost to create

Outlines consequences

Can create an atmosphere of mistrust

Risk of deterring top-tier talent from joining the firm

Can sour the relationship with current employees

Example of an NDA

Apple is one of the most private companies in the world. It keeps its technology and future products closely guarded until it's ready to release them. The idea is to deter competitors from stealing trade secrets and copying its products because it's been a pioneer in technology for most of its life. It also generates buzz as a marketing ploy.

CNBC reported in January 2021 that carmaker Hyundai confirmed in a statement that it was in talks with Apple regarding cars. This, of course, raised suspicion that Apple was possibly entering the car market or creating a product related to automobiles. Hyundai then released a follow-up statement that removed any mention of Apple.

Apple insists on secrecy in all its relationships and it requires that any partner sign an NDA. Apple tells its partners that they can't mention the name "Apple" in any manner and it has threatened partners that have leaked information with monetarily hefty lawsuits.

What Happens If You Break a Non-Disclosure Agreement?

You'll be susceptible to the consequences outlined in the contract if you break an NDA. It's not usually considered a crime but it can be depending on what was violated, such as if the issue is theft of trade secrets.

An individual will typically be sued if they break an NDA and this can result in a monetary fine, termination of employment, or the return of an asset. You may also be sued for intellectual property violations such as copyright infringement or breach of fiduciary duty. A court can levy financial damages and associated legal costs.

How Long Does an NDA Last?

Every NDA is unique so each can last a different amount of time. Common timeframes range from one year to 10 years, however, depending on the information that's to be kept private. An NDA can also be indefinite. It must not be too open-ended or generic for an NDA to be enforceable in some states. The courts will otherwise throw it out.

How Much Does an NDA Cost?

The cost of an NDA can vary depending on the complexity of the agreement. Creating one typically ranges from $175 to $1,500.

What Is an NDA Template?

An NDA template is a non-disclosure agreement format that an individual or company can follow to create their own NDA. The template will have the general legal information and blanks that can be filled in to create a unique NDA between two or more parties that applies to their relationship.

NDA templates can be easily found online through an internet search. Many sites offer NDA templates for use.

Non-disclosure agreements are low-cost, easy-to-create, legally binding documents between two or more parties that keep private information confidential. They're used by organizations and individuals to protect their businesses or personal information and allow businesses to work together without fear of private information falling into the hands of competitors.

It's important to be as detailed as possible when you're drafting an NDA so all parties know what can and cannot be shared as well as the consequences of leaking information.

National Whistleblower Center. " Non-Disclosure Agreements and Whistleblowers ."

CNBC. " Hyundai Motor Says it’s in Early Talks With Apple to Develop a Car, Sends Shares Soaring 19% ."

CNBC. " Doing Business with Apple Means You Probably Can't Tell Anyone About It, As Hyundai Learned ."

Wood Litigation. " Are Non-Disclosure Agreements Enforceable in California? "

Priori Legal. " Non-Disclosure Agreements ."

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Yauhen Zaremba Director of Demand Generation at PandaDoc

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Non-disclosure agreements (NDAs) have become common in the workplace today.

In fact, according to a study most recently updated in 2017, just over one-third of U.S. workers were required to sign an NDA of some kind, and that number’s unlikely to have fallen much since.

These contracts, which are also known as confidentiality agreements, are written agreements that prohibit parties from sharing information that’s confidential.

If you’ve got questions about how to make a non-disclosure agreement, we’ll address them below and offer insider tips, such as how to write a legally binding contract , along the way so that your NDA will be robust and protective.

What does a non-disclosure agreement do?

Non-disclosure agreements, AKA confidentiality agreements , are legally binding contracts that establish confidentiality between parties.

The party (or parties) who sign the NDA agree that any sensitive information they might be privy to won’t be shared with anyone outside of the agreement.

NDAs are a fairly common practice for businesses entering into negotiations with one another.

They have the benefit of allowing parties to share sensitive information and plans without worrying that the information will end up being seen, stolen by, or sold to competitors.

A mutual non-disclosure agreement is where two or more parties share information both ways and agree not to leak that information to outside parties.

If a non-disclosure agreement is breached by either party, the party whose information has been leaked can seek legal action to avoid and prevent any more disclosures and may choose to sue the offending party for monetary damages due to the leaked information.

However, proving that an NDA has been breached is tricky.

So these contracts are often used more as a deterrent rather than as a way to successfully collect damages — although this is possible.

Types of NDAs

While most general non-disclosure agreements contain the same basic information, you may need a specialized NDA based on the relationship between the parties that are sharing confidential information.

Here are a few types of generic non-disclosure agreements that you may need as a business owner:.

1. Patent/product development NDA

A patent-focused non-disclosure agreement allows a company to retain all confidential information regarding their patents or inventions.

This can be useful for startups or established businesses that don’t want employees, vendors, or other third parties to share information about their patent.

Similarly, product development NDAs protect sensitive information regarding a new product before a patent has been filed for it.

2. Employee NDA

An employee NDA informs an employee that he or she may not divulge sensitive information or trade secrets without first gaining the employer’s permission.

Even if you’re unsure what may qualify as confidential information, having employees sign an NDA before joining the company sets a good privacy standard.

Like employees, independent contractors may also be exposed to proprietary information.

These 1099 employees should sign an NDA before beginning to work for a company, just like regular employees do.

3. Job interview NDA

If your talent acquisition team is conducting interviews for a sensitive job, consider drafting a job interview NDA.

It’s possible that interviewers may divulge sensitive information when they ask prospective employees questions during an interview.

Employees who are hired typically sign NDAs, but what about those who didn’t get the job?

Because unhired interviewees may be exposed to confidential information, draft a simple NDA that each person you’re going to interview must sign before the interview begins.

4. Mutual NDA

These legal documents, which are also known as two-way NDAs , allow two different parties to share their trade secrets.

However, these two entities must still keep the information that has been shared between the two parties private.

5. Customer List NDA

If your company sells its customer lists to third parties, you’ll want to make sure that file doesn’t get into the hands of your competitors.

Draft a customer list non-disclosure agreement and have the third party sign it before you turn over this potentially lucrative information.

6. Business plan NDA

Perhaps you need to start attracting investors to your business.

A business plan non-disclosure agreement will come in handy here, as it will keep the details of your business plan secure after you pitch to investors.

This type of NDA can also be helpful for startups that need to show a third party the details of their business plan to receive funding, for instance.

7. Business sale NDA

On the other hand, maybe you’ve finally grown your business to the point that you want to sell it. Now’s the time to whip out a handy business sale NDA.

This confidentiality agreement is useful for keeping trade secrets and business information private during negotiations, such as mergers, investment discussions, potential joint-venture negotiations, and the final sale of a business.

How to write a non-disclosure agreement: What’s included?

Now that you know about the different types of NDAs, it’s time to find out how to write an NDA of your own.

Most standard NDAs follow this format:

• Introduction
• Definition of confidential information
• How to handle confidential information
• Exclusions from confidential information
• Obligations of receiving party
• Duration of agreement
• Resolving disputes
• Integration
• Choice of law
• Signature page with notarization

Easy enough, right? These sections are pretty self-explanatory, so you surely know what each of them should entail, don’t you?

Just kidding — we’ll break down each of these sections so that by the time you’re finished reading, you’ll know all the ins and outs of an NDA like the back of your hand.

NDA Template

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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.

01. Introduction

First and foremost, you’ll need to add an explicit title to the generic non-disclosure agreement.

It can be something as simple as “Non-Disclosure Agreement” or it could be a more specific title, such as “Product Development Non-Disclosure Agreement.”

You’ll also need to state the disclosing party, receiving party, and the purpose of the contract in the unilateral NDA .

The disclosing party is the party that’s disclosing confidential information.

The receiving party is the party that receives this information and is legally obliged to keep it a secret.

Of course, the purpose of the contract is to prevent the disclosure of sensitive information.

Here’s an example of what your standard NDA introduction should look like:

This Non-Disclosure Agreement (the “Agreement”) is entered into by and between ________________ (the “Disclosing Party”) and ______________ (the “Receiving Party”) for the purpose of preventing the unauthorized disclosure of Confidential Information as defined below. The parties agree to enter into a confidential relationship in regards to the disclosure of certain proprietary and confidential information (“Confidential Information”).

If both sides signing the NDA are disclosing confidential information to each other, the NDA should be adjusted to be a mutual non-disclosure agreement. In this case, the introduction would read as follows:

This Non-Disclosure Agreement (the “Agreement”) is entered into by and between _________________ (Party A) and _______________ (Party B) collectively referred to as “the parties” for the purpose of preventing the unauthorized disclosure of Confidential Information defined below. The parties agree to abide by a confidential relationship in regard to the disclosure by one or each of the parties of certain confidential information.

02. Confidential information

Following the introduction, you’ll need to define what confidential information is protected by the legal contract.

Depending on your business, you may have several classes of information that would be considered as trade secrets or otherwise confidential information.

A trade secret is defined as intellectual property that has economic value precisely because this information isn’t public knowledge.

Trade secrets can include everything from formulas, recipes, and processes to practices, designs, and instruments.

For example, Coca-Cola’s recipe for the Coca-Cola Classic soft drink is a trade secret, as the specific formula has led to the soda’s market dominance both in the United States and across the globe.

If everyone had access to this recipe, Coca-Cola’s profits would be diminished as competitors would rip off their secret formula.

There’s no doubt that anyone who has access to this prized recipe is bound heavily by strict NDAs.

Types of information protected by NDAs include but aren’t limited to:

• Standard Operating Procedures (SOPs)
• Formulations
• Technical information
• Financial information
• Architectural drawings
• Design blueprints
• Specialized tools
• Product specifications
• Test results
• Customer lists
• Vendor lists
• Business methods
• Marketing strategies
• Technical know-how
• Medical information

If you’re making money off something that the public domain has no insider knowledge of, you’d benefit from writing your own NDA.

Your confidential information clause may resemble the description from PandaDoc’s free sample NDA :

“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, financial or business projections, investments, marketing plans, or training information, materials, and examples of confidential information.

03. How to handle confidential information

Now that you’ve included the confidential information in the legal document, you should state how the proprietary information should be handled.

Depending on who’s designated as the receiving party, this may include researching the party’s confidentiality practices.

If you’re binding an employee to an NDA, this may not be necessary.

However, if you’re divulging confidential information to a third party, such as a potential partner or vendor, you’ll want to do your homework on how the organization handles confidentiality.

Next, define the standard of care.

This is essentially how strictly the confidential information should be handled.

Generally, NDAs state “commercially reasonable” or “in strictest confidence” to avoid negligent or willful divulgence of trade secrets.

The degree of standard of care will depend on the confidential information you’ are protecting.

In Coca-Cola’s situation, we can easily assume that anyone who has access to the prized formula is bound under the “in strictest confidence” standard of care.

An employee who must work with a partner or vendor may be held to the “commercially reasonable” standard of care, so they can share aspects of the confidential information that helps accomplish business-related objectives .

04. Non-confidential information

After you’ve explicitly discussed what information is protected and how it should be handled, the NDA must state which information isn’t confidential.

This may seem redundant, but it’s needed for clarity. Sticking with the Coca-Cola case, an example of non-confidential information would be the company’s bottling process.

Coca-Cola doesn’t make money off how it fills its bottles. It’s what’s inside them that counts.

05. Obligations of the receiving party

Next, it’s time to discuss the obligations of the receiving party.

This section describes how the receiving party must maintain the information’s confidentiality and limit its use. You’ll want to specify under which conditions the receiving party is permitted to reveal protected information.

This may be under no circumstances, or under special circumstances where the receiving party may need to work collectively with another party for business purposes.

If your NDA is a mutual agreement or a more complicated agreement, you’ll want a long-form statement that describes the obligation of the receiving party.

This may include requiring the return of all trade secret documents or the prohibition of activities that may leak confidential information to undesired parties.

06. Duration of the agreement

Another important component of a non-disclosure agreement is the time period of the disclosure of information and confidentiality.

First, detail the time period relating to information sharing.

This could be while the NDA is active or during the first few months of the relationship between the receiving and disclosing party.

This section will depend on the purpose of the NDA and the parties’ objectives.

Next, determine the effective date of the NDA and how long the duty of confidentiality lasts.

Generally, you’ll have three options: a fixed period of time, in perpetuity, or an indefinite period of time.

You may choose a fixed period of time by specifying that the agreement will be active until a certain date. If you want rock-solid confidentiality, opt for the in-perpetuity duration.

This forbids the receiving party from divulging protected information under any circumstances in the future.

For an indefinite period of time, you may state that the NDA is active until 1) the disclosing party decides to end the agreement or 2) the confidential information no longer qualifies as a trade secret because it has become part of the public domain.

07. Resolving disputes

You’ve laid the groundwork for most of the nitty-gritty NDA details. Now, it’s time to address disputes.

Although the purpose of an NDA is to avoid breaches of confidentiality, these things may still happen.

In your standard NDA, you’ll want to discuss what the remedy is for a potential breach of contract and any possible legal action that may be taken as a result.

Remedies can include, but aren’t limited to, money for damages, a predetermined fine amount, a court order known as an injunction, loss of employment, and the entitlement to an attorney’s fees that were spent on enforcing the legal contract.

Be careful, though, of specifying an amount of money for damages.

Some courts may refuse to enforce damages that are considered to be too high, and damages that are set too low may not protect your trade secrets securely.

It’s also wise to consider adding an alternative dispute resolution clause.

This section is basically about both parties coming together privately, whether that’s through a casual meeting or official mediation, to resolve any disputes.

Why is an alternative dispute resolution necessary?

For one, court proceedings are public information.

Many businesses would prefer to discuss disputes privately rather than sharing these proceedings with the world.

It’s also advisable to seek an alternative dispute resolution because it can often make things more easy and efficient.

Depending on where you file a court order, getting a hearing scheduled and a final decision could take weeks if not months.

Alternative dispute resolutions allow for a more speedy and flexible time frame compared to litigation.

08. Finalizing the NDA

While all of the aforementioned information is great, the document doesn’t mean anything until your NDA is properly finalized.

Follow these easy steps to ensure that your NDA is considered to be a legally binding contract.

1. Integration clause

In the simplest terms, the integration clause verifies that the signed copy of the NDA is the final version.

This clause ensures that parties can’t rely on past statements once the NDA is signed.

Furthermore, the integration clause may also stipulate that changes to the agreement may only be valid if they’re presented through an addendum.

An addendum is an official signed agreement finalized after the initial NDA was signed.

2. Choice of law

Next, specifying the choice of law in your NDA is critical.

This designates which state law applies to the non-disclosure agreement if a lawsuit should develop.

The easiest way to do this is to list that the agreement shall be governed by the laws of the state you work in.

3. Signature block

Once you’ve got the integration and choice of law formalities out of the way, it’s time to make room for signatures .

Each person who signs the NDA should have their own signature block. Include a line for the signature, the printed name of the party, and the date the NDA was signed.

4. Notarization

Finally, make sure your NDA is signed in front of a notary.

A notary public is a government-appointed official who witnesses the signing of important documents.

Notaries verify the identity of signers and their awareness of the details of the contract.

When drafting your notary section, be sure to include a line for the notary’s signature, the notary ID number, and the notary license expiration date.

If you want an easier and more time-efficient means of getting documents notarized, check out PandaDoc Notary .

Non-disclosure agreements vs. non-compete agreements

While non-disclosure agreements forbid parties from sharing trade secrets and other confidential information, it isn’t the only document that can give your business a competitive advantage. Enter, the non-compete agreement.

What’ is a non-compete agreement? This type of legal contract restricts employees or partners from competing in your industry during the business relationship or after it ends.

Many companies issue non-compete agreements to prevent their employees or former employees from jumping ship and working for their competitors.

You may want to consider adding a non-compete clause to your NDA if the benefits of such a clause sound tempting.

Including a non-compete clause streamlines your business’s competitive advantage.

Your employees or strategic partners will be fully aware of what they can and cannot do with your confidential information during your business relationship and after it’s ended.

If you do decide to include non-compete language in your NDA, be sure to include this in the title of your document in order to avoid confusion .

This can be as easy as stating “Non-Disclosure Agreement and Non-Compete Agreement” at the top of your document.

How to make an NDA legally binding

To ensure that your NDA is legally binding, follow these steps:

1. Include an integration clause

The integration clause is how you verify that the signed copy of your NDA is the final version. It allows parties to ensure that past statements cannot be used or included once the NDA is signed.

It can also state that any changes to the agreement will only be valid if added via an addendum.

2. Choose the applicable law

Select your choice of law for the NDA. This determines which law applies to the NDA if a lawsuit occurs. You can simply state that the agreement will be governed by the laws of the state in which you work.

3. Add a signature block

Create a space for signatures. Each party signing an NDA needs to be aware of how to sign an NDA correctly and have their own signature block, which should include a line for the signature, the printed name of the party, and the date.

It’s advisable to get all parties to sign your NDA before a notary who verifies the identity of the signing parties and their awareness of the contract details.

Ensure that you include a line for the notary’s signature, the notary ID number, and the notary license expiration date.

As well as ensuring that your NDA has been drafted and executed correctly, the contract should be supported by consideration.

What happens when someone violates an NDA?

Usually, having an NDA is enough to deter people from revealing confidential information. But when someone does violate the terms of an NDA, it can have very serious consequences.

NDAs are civil contracts, which means that breaking them isn’t technically a crime in of itself.

But depending on whatever laws are referred to in the NDA, violating it could come with large financial penalties.

Violating the terms of an NDA leaves you vulnerable to lawsuits from the other party, and you could be required to pay monetary damages and even the associated legal costs.

Revealing trade secrets or sensitive company information to a competitor is illegal, and it can carry legal consequences, which include fines and potentially being made subject to an injunction that forbids you from disclosing any relevant information.

For instance, this could happen in the case of you disclosing private information regarding patents, trademarks, or trade secrets.

The injunction would keep the partner or employee from working for or with a competitor, and the monetary damages would help make up for the violation.

How to write an NDA: Easy NDA templates from PandaDoc

Don’t worry if learning how to create a non-disclosure agreement still seems intimidating.

PandaDoc has excellent free non-disclosure agreement samples and templates to give you a good idea of what the completed document should look like.

Writing a non-disclosure agreement doesn’t have to be stressful.

If you’re feeling a little overwhelmed about writing your own NDA, consider PandaDoc’s easy-to-use NDA templates.

Hiring a law firm to draft an original NDA can be expensive .

Utilizing PandaDoc’s NDA template is a quick and compliant way to ensure your company’s confidential information is protected.

Let PandaDoc do the legwork while you rest assured your confidential information is protected.

Download the free printable confidentiality agreement form by PandaDoc today to see just how easy it is to draft your own NDA.

PandDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDocs services are governed by our Terms of Use and Privacy Policy.

Originally published September 28, 2022, updated January 12, 2023

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WTO / Legal / Non-Disclosure / Free Non-Disclosure Agreement (NDA) Templates (How to Write)

Free Non-Disclosure Agreement (NDA) Templates (How to Write)

A Non-Disclosure Agreement (NDA), popularly referred to as a “Confidentiality Agreement,” is a legal agreement that binds the Recipient of confidential Information from disclosing it to unauthorized parties. The Party or Parties upon signing the Agreement acknowledge that they shall not disclose any Confidential or Proprietary Information they obtain from the Disclosing Party.

Free Templates by Types

Categories of NDAs

Generally, there are three main categories of NDAs:

• Unilateral NDA :Two parties are involved in this type of NDA. Only one party discloses Confidential Information, and the other party is bound to ensure that the information is not disclosed further without consent from the Disclosing Party.
• Bilateral NDA : Two parties are involved in this type of NDA. Whereby both parties disclose Confidential Information, they are both tasked with ensuring that the information disclosed remains confidential.
• Multilateral NDA : Generally, three or more parties are involved in this type of NDA. Of which only one party discloses Confidential Information, and the rest is to ensure that the confidentiality of the information is maintained.

Benefits of NDAs

Signing a NDA has many benefits. 

Here are some of the significant benefits of an NDA:

• Since a NDA is a legal document, it is of utmost importance for any conflict that might arise in the future. Any party that breaches the Agreement is held accountable and is legally liable to compensate for any damages caused.
• It clearly defines what is to be considered as “Confidential” thereby avoiding any ambiguity or loss of information
• It ensures that any information shared between engaging parties remains confidential and reduces the chances of any critical information being disclosed to the public.

An NDA can also help in safeguarding business assets, including but not limited to:

• Business Strategies and methods
• Designs, Blueprints, and Specifications
• Physical devices and Articles
• Computer Software
• Customer Lists
• Collection of data

Precautions while creating and signing a NDA

Before signing an NDA, here are a few things you need to take care of:

• Go through the document and ensure that all the information mentioned is precise and that you fully understand the Agreement.
• Make sure that the parties involved in the Agreement read the entire NDA and verbally explain it to avoid any misunderstandings.
• Avoid including non-required clauses or conflicting sentences when drafting an NDA.

General Contents of a NDA

All NDAs must have the following:

• The parties involved
• The disclosure Period
• Definition of what is confidential
• The term of the Agreement
• Any exclusions from what is to be kept confidential
• Any obligations to keep the information confidential
• Any types of acceptable disclosure, such as law enforcement
• Ending the Agreement
• Remedies in case of breach of confidentiality

Non-Disclosure Agreement Glossary

Here are some of the words you are likely to come across when drafting or signing an NDA:

• Cease and Desist: a letter from the owner of the Confidential/Proprietary Information requesting the alleged illegal activity to be stopped with immediate effect.
• Clean Room: this is a method of developing proprietary material with an isolated development team monitoring the content produced, to ensure that they can provide evidence that any similarities to other works or products are solely due to legitimate constraints and not copying.
• Common-Law: This is a system of legal rules derived from previous principles established by court decisions.
• Copyright: is a type of intellectual property that limits other parties from copying, selling or making derivative versions of creative work, usually for a limited time
• Database: a structured set of information organized in a manner to facilitate its retrieval.
• Declaratory Relief: it refers to decisions by the court, which determines the rights of the parties in the Agreement without ordering anything be done or awarding damages.
• Economic Espionage Act: this act makes it a federal crime for any person to steal, receive, possess, or trade secrets knowing that it has been stolen.
• Evaluation Agreement: this is an agreement in which one party agrees to share their idea, and the other party consents to evaluate it and, after that, not disclose or use the idea.
• Fiduciary Relationship: Also known as a confidential relationship. A fiduciary relationship is a relationship in which one party places special trust, reliance, and confidence in and is influenced by another party who must act on behalf of the party.
• Generally known: Information is usually known if it is available in the public domain or is commonly used within an industry.
• Improper Means: Acquiring trade secrets through theft, breach, bribery, or enticement to breach secrecy or espionage through electronic or other means.
• Injunction: a court order is necessitating that a party stops a particular activity or compelling them to carry out a specific act.
• Jurisdiction: the rule of a court to hear certain types of cases.
• License: official permission to do, use, or own something.
• Misappropriation: Breach of trade secrets.
• Non-Competition Agreement: this is a legal agreement between an employer and an employee whereby the employee approves not to enter into competition with the employer during or after the employment period.
• Non-Solicitation Provision: this is a contract restricting an individual/former employee from soliciting clients after the employee departs from the business.
• Patent: a grant from a government, protecting an invention from employees, contractors, or third parties from sharing or copying the concept/design.
• Trademark: a symbol, word, words, design, device, slogan, or combination legally registered or established by use as representing a company or product.
• Trade Secret: any information that is of economic value to the business that is not available in the public domain.
• Uniform Trade Secrets Act (UT SA): This is a model act, drafted by the National Conference on Uniform State Laws and has been adopted as the basis of trade secrets in over 40 states.

How to Write a NDA

Introduction paragraph.

In the introduction paragraph, include the names of both the “Disclosing Party” and the Recipient of the “Confidential Information,” the “Receiving Party.” The terms are capitalized to show that they are defined in the Agreement.

This Non-Disclosure Agreement (NDA) is entered into by and between ____________ (The “Disclosing Party)_______________ (The “Receiving Party”) conjointly referred to as the “parties” in this Agreement to prevent the unauthorized disclosure of information as defined below.

Definition of confidential information

In this paragraph, define what is to be considered confidential or proprietary information without actually disclosing the actual information. For instance, “A software that helps you analyze financial data.” You must also ensure that any information not designated as confidential is clearly defined.

  For this Agreement, “Confidential or Proprietary Information” shall refer to any information that the Disclosing Party shall provide to the Receiving Party, be it technical or non-technical. The information, whether in writing or any other form, shall be considered confidential in this Agreement. If the information provided is in written form, then the Disclosing Party shall label or stamp the material with the word “CONFIDENTIAL” or any other similar warning. If the information is conveyed orally, the Disclosing Party shall indicate in writing that such oral communications constituted Confidential Information.

Exclusions from confidential information

This paragraph describes all the information not covered in the Agreement.

The Receiving Party shall not be held accountable for disclosing any information that is already known to the public. 

Obligations of receiving party

This clause states what is required of the Receiving Party upon signing the “Agreement.”

“The Receiving Party shall at all times uphold and maintain the Confidential Information of the other Party in utmost confidence for the ultimate and exclusive benefit of the “Disclosing Party.”

Duration of agreement

This clause defines the period to which the Agreement should last. It can either be infinite or definite, depending on the type of information covered in the Agreement.

Example of Infinite Period Clause

The Receiving Party shall be bound to keeping the “Confidential Information” as such until such a time when the Confidential Information no longer qualifies as a trade secret or until the Disclosing Party sends, in writing, a notice to the Receiving Party relieving them of their duties and responsibilities from this Agreement.

Example of Fixed Period Clause

The Receiving Party shall uphold the Confidentiality of the Information provided by the Disclosing Party, and this Agreement shall remain in effect until ______________

Relationships

This clause is meant to dissociate from any other relationships that are not the intent of the Agreement.

This Agreement shall not be considered to institute either party a partner, Joint venture, or employee of the other party for any purpose of any kind.

Severability

This clause provides that, in the event of a legal battle over the Agreement and it is ruled by the court that a section of the Agreement is void, that part can be ruled out. The rest of the Agreement remains valid.

Integration

This clause acknowledges that the version Agreement you are signing is the final version and that all other statements made in the past are void.

This clause provides that any terms and conditions of this Agreement shall only be waived or amended upon written consent from the Disclosing Party.

Types of NDA’s

There are various types of NDAs, including:

• Business Associate (HIPAA) Agreement : Provides sample language and provisions necessary for compliance with the HIPAA rules and regulations and the HITECH Act, which covers the Relationship between a HIPAA-covered entity and a business associate.
• Business Plan Non-Disclosure Agreement: This Agreement is used when sharing a business plan with investors, consultants, contractors, potential employees, and anyone else assessing your planned enterprise.
• Business Sale Non-Disclosure Agreement: allows a seller to privately disclose all confidential information regarding sales, customers, and financial details to a potential buyer.
• Commercial Real Estate Non-Disclosure Agreement : is meant for use when the owner of a commercial real estate wants to disclose Confidential Information about a property to prospective buyers, consultants, tenants, business partners, or investors.
• Customer List Non-Disclosure Agreement: is intended for use by companies that want to sell or license their customer lists to other businesses.
• Employee Non-Disclosure Agreement : limit employees from sharing any confidential or proprietary information without permission
• Film (Movie) Non-Disclosure Agreement : meant for use when sharing original film concept, storyline or screenplay
• Financial Information Non-Disclosure Agreement : often used when disclosing financial information in contemplation of a business acquisition, an audit, or an account analysis.
• HIPAA (Employee) Non-Disclosure Agreement : used to ensure that an employee of healthcare facilities to agree not to disclose any medical information without permission.
• Independent Contactor Non-Disclosure Agreement : intended for use with workers/contractors who perform tasks for you or your business.
• Intern Non-Disclosure Agreement : meant to protect interns from disclosing any Confidential Information during Internships.
• Landlord-Tenant Confidentiality Agreement : is meant for use when the landlord is disclosing any Confidential Information about a property to a potential tenant.
• Mutual Non-Disclosure Agreement : is meant to create a Confidential Relationship between two parties engaging in exchange of Confidential Information.
• Patent/Inventory Non-Disclosure Agreement: intended for use when protecting an invention from employees, contractors, or third parties from sharing or copying the concept/design.
• Product Development Non-Disclosure Agreement : This Agreement is used to protect the Releaser’s Intellectual Property before patenting.
• Real Estate Buyer Confidentiality Agreement :   This Agreement is for use when a seller of a property is looking to disclose Confidential Information to the potential buyer and wouldn’t want such information to be made public.
• Software Development Non-Disclosure Agreement : This Agreement intended for use when sharing information with another Party to create patentable software.
• Trade Secret Non-Disclosure Agreement: is intended for use when disclosing any proprietary information that is to be kept confidential.
• Unilateral Non-Disclosure Agreement : a standard form in which only one party shall be responsible for maintaining the confidentiality of the information provided.
• Violation of Non-Disclosure Agreement : also referred to as a Cease and Desist Order. This Agreement is meant to warn the Receiving Party of Confidential Information that if they do not stop violating the information, legal actions shall be taken against them.
• Volunteer Non-Disclosing Agreement : This Agreement is intended for use when any guests are agreeing to provide their time and labor for free with the condition of upholding any information shown to them with utmost confidence.
• Website Design Non-Disclosure Agreement : This Agreement is intended for use when protecting confidential and proprietary information against any third-party competitors during the development of a website.

Templates by State

Frequently asked questions.

The other party is not lawfully obliged to keep any information provided to them before entering an Agreement a secret. However, you may decide to ask them not to disclose the information you have disclosed to them.

No. You may not amend an NDA. Once both parties to an agreement have acknowledged the Agreement, then your only option is to renegotiate with them before making any changes. You may request the other parties to maintain or renew the Agreement if an NDA expires.

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4 things you should know about non-disclosure agreements

Non-disclosure agreements (NDAs) are legally binding agreements to keep information confidential. They go by other names in certain contexts, including confidentiality agreements (CAs), confidential disclosure agreements (CDAs), and proprietary information agreements (PIAs). No matter what they are called, the basic underpinning is the same: parties who have signed an agreement cannot discuss any information the agreement covers with a non-authorized party.

There are two main types:

• Unilateral NDA. Only one party has confidential information to protect — the disclosing party — and only one party agrees to keep it confidential — the receiving party.
• Mutual or bilateral NDA. Both or all parties have confidential information, and both agree to keep it confidential.

Companies use NDAs in many situations and to protect many types of information. Take, for example, the mergers and acquisitions process. When a company wants to be acquired, it is common to ask an interested buyer to sign an agreement so that confidential information can be freely shared during negotiations. Each side knowing it is safe helps the business relationship flourish.

With increasing frequency, NDAs are used when a worker has access to confidential information, like business plans, customer lists, marketing strategies, plans for a new product, pricing plans, proprietary processes, trade secrets, or other information that gives the company a competitive advantage — an advantage that would vanish if the information was disclosed. Because employers do not want workers to distribute this information or start a competing business of their own, they often have workers sign non-disclosure agreements to keep such information within the organization.

However, there is starting to be some skepticism in certain quarters toward what some see as the overuse of NDAs. For example, they prevented many people who settled #MeToo claims from discussing their situations, which some argue suppressed necessary information that could bring impermissible behavior to light. This situation has led to stricter scrutiny of non-disclosure agreements, making it all the more critical that they are drafted with great specificity and used judiciously.

The following are four things every organization ought to know.

1. An NDA is a legal document that protects your business information and trade secrets from vendors, employees, and third parties

Non-disclosure agreements help employers by protecting valuable, sensitive business information. Workers may need access to such information to do their jobs, and NDAs make it clear that they can use such information for work purposes but cannot share it outside the organization. Thus, the company has a reasonable level of assurance that work can be accomplished and sensitive information will remain closely guarded.

Beyond that, non-disclosure agreements give employers the following benefits:

• Provide clear expectations of workers. A good agreement clearly delineates which information is protected — for example, whether there are any exclusions — and explicitly spells out the consequences of breaking the NDA. A well-written document will leave a worker with little doubt as to which information is proprietary and must be handled in confidence — and what would happen if that did not occur.
• Help protect trade secrets. An organization may need to disclose some or all of a trade secret with third parties, like vendors, with whom they do business. If the third parties sign NDAs, the trade secret will still enjoy legal protection.
• Grant an employer additional legal recourse. If a worker who has signed an NDA discloses a trade secret, the business may have additional remedies beyond that agreement. In other words, it is not limited to the standard recourse of filing a state-law misappropriation claim. In most cases, a breach of NDA claim is also simpler to pursue than, say, a trade secret misappropriation claim.

2. NDAs are enforceable when they are signed — if they are properly drafted and executed

NDAs are enforceable once signed, provided they have been drafted and executed properly. Unilateral NDAs need only the signature of the receiving party, whereas mutual non-disclosure agreements need the signatures of both parties. There are some differences from state to state, but on the whole, this holds true for most jurisdictions.

The NDA must be supported by consideration, a legal term meaning there was a “ bargain for exchange ” between the parties — something was bargained for and received from the promisor to the promisee. To apply this to the case of an employment NDA, the organization gets its confidential information protected, and the worker, arguably, gets a job. In other words, at-will employment may be sufficient consideration to make agreements enforceable.

An NDA could be unenforceable if it is too broad, is not for a defined time period, covers information that is not confidential, or asks for illegal conduct. There are a great many circumstances that could nullify an agreement, but these are the circumstances that are an immediate red flag in most jurisdictions:

• Overly broad language. If an employer writes an NDA that is too broad or too restrictive, a court is more likely to view it with skepticism. That is especially true if the agreement is not limited in duration or scope.
• Not confidential information. If an organization has already disclosed the information covered by the non-disclosure agreement, then a court might say the agreement is moot. After all, what’s the point of trying to keep public knowledge a secret? An important thing to note is that disclosure does not necessarily have to be intentional. Disclosure through lax behavior counts, too.
• Request for something illegal. An NDA agreement that asks the worker to keep mum on an issue they are legally obligated to report would not withstand scrutiny.
• Consideration is not clear. In the previous section, we noted the common concept of consideration in an employment agreement. Not every judge accepts that so willingly, however. If it is unclear whether there was consideration or that power between the parties was grossly imbalanced, the agreement may be at risk.

3. Legal recourse is possible for a violated NDA

Non-disclosure agreements are a legal contract. If broken, the aggrieved party can take legal action; they should spell out what will happen if breached. Commonly, claims stemming from broken NDAs include:

• Breach of the contract
• Breach of fiduciary duty
• Misappropriation of trade secrets
• Copyright infringement
• Other intellectual property law violations

Imagine a worker or former worker breaks an NDA. If the business learns of this, it may seek an injunction to prevent the employee from further disclosure. The business may also file a lawsuit seeking financial damages for all losses related to the breach of confidentiality obligations.

Once again, state laws may differ somewhat in handling breach of a non-disclosure agreement.

4. Language and word choice in NDAs are of the utmost importance

Precise language is of the utmost importance in non-disclosure agreements. A well-drafted document defines obligations, safeguards sensitive information, and promotes clarity. Ambiguities or loopholes can lead to messy legal disputes or breaches of confidentiality. Clear language helps the signatories understand their rights and responsibilities and fosters compliance.

Done correctly, NDA agreements are legally binding contracts between two or more parties. Depending on the situation, NDAs differ by state and jurisdiction, making it tricky for organizations to ensure they have the utmost legal protection they need.

Not sure which is the right template for your confidential information? Do your organization’s NDAs protect you from potential lawsuits in the future? Start a free trial of Practical Law to access expert-written NDA samples and checklists to quickly execute confidentiality agreements and safeguard your company’s closely guarded information.

Related insights

The basics of non-compete agreements

The basics of the at-will employment doctrine

Still Drafting NDAs the Old-Fashioned Way?

Access a collection of NDA-related resources, including sample agreements, how-to guides and checklists created by 280+ expert attorney-editors

This unilateral nondisclosure agreement is between , an individual a(n) (the " Disclosing Party ") and , an individual a(n) (the " Receiving Party ").

The Disclosing Party has developed certain confidential information that it wants to make available to the Receiving Party for the purpose of .

The Receiving Party wants to review, examine, inspect, or obtain the confidential information only for the above-described purposes, and to otherwise maintain the confidentiality of that information pursuant to this agreement.

The parties therefore agree as follows:

1. CONFIDENTIAL INFORMATION.

The Disclosing Party may (but is not required to) disclose certain of its confidential and proprietary information to the Receiving Party. " Confidential Information " means:

• (i) provided or shown to the Receiving Party or its directors, officers, employees, agents, and representatives (each a " Receiving Party Representative ") by or on behalf of the Disclosing Party or any of its directors, officers, employees, agents, and representatives (each a " Disclosing Party Representative "); or
• (ii) obtained by the Receiving Party or a Receiving Party Representative from review of documents or property of, or communications with, the Disclosing Party or a Disclosing Party Representative; and
• (b) all notes, analyses, compilations, studies, summaries, and other material, whether provided orally, in writing, or by any other media, that contain or are based on all or part of the information described in subsection (a) (the " Derivative Materials ").

The Disclosing Party shall identify Confidential Information disclosed orally as confidential within    days of disclosure. The Disclosing Party's failure to identify information as Confidential Information is not an acknowledgment or admission by the Disclosing Party that that information is not confidential, and is not a waiver by the Disclosing Party of any of its rights with respect to that information.

2. OBLIGATION TO MAINTAIN CONFIDENTIALITY .

• A. a Receiving Party Representative who needs to know the Confidential Information for the purposes
• of its business with the Disclosing Party;
• B. with the Disclosing Party's prior written authorization; or
• (ii) use the Confidential Information for any purposes other than those contemplated by this agreement.
• (b) No Reverse Engineering. The Receiving Party may not reverse engineer, disassemble, or decompile any prototypes, software, or other tangible objects that embody the Confidential Information and that are provided to the Receiving Party under this agreement.
• (c) Term. The Receiving Party shall, and shall require each Receiving Party Representative to, maintain the confidentiality and security of the Confidential Information until the earlier of: (i) such time as all Confidential Information disclosed under this agreement becomes publicly known and is made generally available through no action or inaction of the Receiving Party or (ii) the third anniversary of the disclosure. However, to the extent that the Disclosing Party has disclosed information to the Receiving Party that constitutes a trade secret under law, the Receiving Party shall protect that trade secret for as long as the information qualifies as a trade secret.

3. EXCLUSIONS.

The obligations and restrictions of this agreement do not apply to that part of the Confidential Information that:

• (a) was or becomes publicly available other than as a result of a disclosure by the Receiving Party in violation of this agreement;
• (i) the source of such information is not bound by a confidentiality agreement with the Disclosing Party or is not otherwise prohibited from transmitting the information to the Receiving Party or a Receiving Party Representative by a contractual, legal, fiduciary, or other obligation; and
• (ii) the Receiving Party provides the Disclosing Party with written notice of such prior possession either (A) before the execution and delivery of this agreement or (B) if the Receiving Party later becomes aware (through disclosure to the Receiving Party) of any aspect of the Confidential Information as to which the Receiving Party had prior possession, promptly on the Receiving Party so becoming aware; or
• (i) provide the Disclosing Party with prompt notice of any such request or requirement before disclosure so that the Disclosing Party may seek an appropriate protective order or other appropriate remedy; and
• (ii) provide reasonable assistance to the Disclosing Party in obtaining any such protective order.
• If a protective order or other remedy is not obtained or the Disclosing Party grants a waiver under this agreement, then the Receiving Party may furnish that portion (and only that portion) of the Confidential Information that, in the written opinion of counsel reasonably acceptable to the Disclosing Party, the Receiving Party is legally compelled or otherwise required to disclose. The Receiving Party shall make reasonable efforts to obtain reliable assurance that confidential treatment will be accorded any part of the Confidential Information so disclosed; or
• (d) was developed by the Receiving Party independently without breach of this agreement.

4. RETURN OF PROPERTY .

If the Disclosing Party requests, the Receiving Party shall, and shall cause each Receiving Party Representative to promptly (and no later than    days after the request):

• (a) return all Confidential Information to the Disclosing Party; and
• (b) destroy all Derivative Material and within   days of this destruction, provide a written certificate to the Disclosing Party confirming this destruction.

5. NO PUBLICITY.

The parties shall keep the existence of this agreement, and the transactions or discussions contemplated by this agreement, strictly confidential, except as required by law and except as the parties otherwise may agree in writing before a disclosure.

6. OWNERSHIP RIGHTS.

The Receiving Party acknowledges that the Confidential Information is, and at all times will be, the Disclosing Party's sole property, even if suggestions made by the Receiving Party are incorporated into the Confidential Information. The Receiving Party obtains no rights by license or otherwise in the Confidential Information under this agreement. Neither party solicits any change in the other party's organization, business practice, service, or products, and the disclosure of Confidential Information may not be construed as evidencing any intent by a party to purchase any products or services of the other party or as an encouragement to expend funds in development or research efforts. The Confidential Information may pertain to prospective or unannounced products. The Receiving Party may not use the Confidential Information as a basis on which to develop or have a third party develop a competing or similar plan or undertaking.

7. FUTURE PRODUCTS; RESIDUALS.

The confidentiality terms of this agreement do not limit the Receiving Party's right to develop or acquire products independently without use of the Confidential Information. Further, the Receiving Party may use for any purpose the residuals resulting from access to or work with the Confidential Information. However, the Receiving Party may not disclose the Confidential Information except as expressly permitted under this agreement. The term "residuals" means information in intangible form that is retained in memory by people who have had access to the Confidential Information, including ideas, concepts, know-how, or techniques contained in that Confidential Information. The Receiving Party is not required to limit or restrict the assignment of such persons or to pay royalties for any work resulting from the use of residuals. This section does not give the Receiving Party a license under the Disclosing Party's copyrights or patents.

8. NO OBLIGATION.

Nothing in this agreement obligates either party to proceed with any transaction between them, and each party reserves the right, in its sole discretion, to terminate the discussions contemplated by this agreement concerning the business opportunity, if any, and to cease further disclosures, communications, or other activities under this agreement on written notice to the other party. Any commitment to proceed with a transaction will be set forth in a separate agreement signed by the parties.

9. NO WARRANTY.

ALL CONFIDENTIAL INFORMATION IS PROVIDED "AS IS." THE DISCLOSING PARTY MAKES NO WARRANTIES, EXPRESS, IMPLIED, OR OTHERWISE, REGARDING THE ACCURACY, COMPLETENESS, OR PERFORMANCE OF ANY SUCH INFORMATION.

10. GOVERNING LAW; EQUITABLE RELIEF.

• (a) Choice of Law. The laws of the state of govern this agreement (without giving effect to its conflicts of law principles).
• (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in County, .
• (c) Equitable Relief. The Receiving Party's breach of this agreement will cause irreparable harm to the Disclosing Party and monetary damages may not be a sufficient remedy for an unauthorized disclosure of the Confidential Information. If the Receiving Party discloses the Confidential Information in violation of this agreement, the Disclosing Party may, without waiving any other rights or remedies and without posting a bond or other security, seek an injunction, specific performance, or other equitable remedy to prevent competition or further disclosure, and may pursue other legal remedies.

11. AMENDMENTS.

No amendment to this extension will be effective unless it is in writing and signed by both parties or their authorized representatives.

12. ASSIGNMENT AND DELEGATION.

• (a) No Assignment. Neither party may assign any of its rights under this agreement, except with the prior written consent of the other party. All voluntary assignments of rights are limited by this subsection.
• (b) No Delegation. Neither party may delegate any performance under this agreement, except with the prior written consent of the other party.
• (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made in violation of this section, it is void.

13. COUNTERPARTS; ELECTRONIC SIGNATURES.

• (a) Counterparts. The parties may execute this agreement in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
• (b) Electronic Signatures. This agreement, agreements ancillary to this agreement, and related documents entered into in connection with this agreement are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.

14. SEVERABILITY.

If any provision in this agreement is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this agreement, but this agreement will be construed as if the invalid, illegal, or unenforceable provisions had never been contained in this agreement, unless the deletion of those provisions would result in such a material change that would cause completion of the transactions contemplated by this agreement to be unreasonable.

15. NOTICES.

• (a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
• (b) Addresses. A party shall address notices under this section to a party at the following addresses:
• If to the Disclosing Party:
• If to the Receiving Party:
• (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.

16. WAIVER.

No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this agreement will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.

17. ENTIRE AGREEMENT.

This agreement constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement with respect to the subject matter of this agreement. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this agreement are expressly merged into and superseded by this agreement. The provisions of this agreement may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this agreement by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this agreement. Except as set forth expressly in this agreement, there are no conditions precedent to this agreement's effectiveness.

18. HEADINGS.

The descriptive headings of the sections and subsections of this agreement are for convenience only, and do not affect this agreement's construction or interpretation.

19. EFFECTIVENESS.

This agreement will become effective when all parties have signed it. The date this agreement is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this agreement.

20. NECESSARY ACTS; FURTHER ASSURANCES.

Each party and its officers and directors shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this agreement contemplates or to evidence or carry out the intent and purposes of this agreement.

[SIGNATURE PAGE FOLLOWS]

Each party is signing this agreement on the date stated opposite that party's signature.

Free Unilateral Non-disclosure Agreement Template

How-to guides, articles, and any other content appearing on this page are for informational purposes only, do not constitute legal advice, and are no substitute for the advice of an attorney.

Unilateral non-disclosure agreement: How-to guide

In today's cut-throat business world, keeping secrets safe is crucial to staying ahead and protecting what's valuable. Whether it's your special technology, big plans, or customer information, it's vital to stop others from using it without permission.

That's where the Unilateral Non-Disclosure Agreement (NDA) comes in. This legal document is like a shield, protecting your private information when you share it with others. Unlike mutual NDAs, where both sides have to keep quiet, a unilateral NDA mostly helps the one sharing the secrets by making the other side promise to keep things quiet.

In this guide, we'll dive deep into unilateral NDAs, explaining what they're for, what they include, and how to make one. Whether you're starting a business, running a company, or working with clients, understanding and using unilateral NDAs can help keep your secrets safe and protect what's yours.

What is a unilateral non-disclosure agreement (NDA)?

A unilateral non-disclosure agreement is a legally binding contract between two parties, where one party (the disclosing party) disclose secret information to the other party (the receiving party), imposing necessities on the other party to maintain the confidentiality of the disclosed information. In essence, it serves as a safeguard to protect sensitive company information from unauthorized leaks or use.

How is a unilateral NDA different from a mutual NDA?

Unilateral NDA : Also known as a one-way NDA, this type of agreement is commonly used when only one party is disclosing confidential information to the other party. The receiving party agrees to keep the information that is disclosed confidential and refrain from disclosing it to third parties or using it for unauthorized purposes.

Mutual NDA : Also known as a two-way or bilateral NDA, this type of agreement is used when both parties are disclosing confidential information to each other. In a mutual NDA , both parties disclose confidential information, agree to keep it a secret, and refrain from disclosing it to third parties or using it for unauthorized purposes.

These two types of NDAs serve different purposes and are utilized based on the specific circumstances of the business relationship and the nature of the confidential information being shared.

When do you need a unilateral non-disclosure agreement?

A one-way non-disclosure agreement is a must-have in situations where keeping secrets safe is a top priority. Here are some key times when using one is super important:

Sharing proprietary business information with third parties

Whether you're disclosing the secrets of a trade, proprietary technology, joint venture, or strategic company plan, sharing secret information with third parties, such as vendors, suppliers, or strategic partners, requires the implementation of this NDA. This agreement ensures that your private data remains protected and prevents unauthorized leaks or use by the receiving party.

Collaborating with freelancers, contractors, or consultants

Engaging freelancers, contractors, or consultants to work on projects often involves sharing private data about your company’s operations, processes, or intellectual property. Implementing a unilateral NDA in such collaborations is essential to safeguard your proprietary information.

Legal framework guiding unilateral non-disclosure agreements

When creating and enforcing Unilateral Non-disclosure Agreements (NDAs) in the United States, it's crucial to be mindful of the legal guidelines set forth by relevant laws and fundamental principles. Here's a rundown of the important laws and principles that shape NDAs:

1. Uniform Trade Secrets Act (UTSA)

The Uniform Trade Secrets Act  (UTSA) acts as a shield for trade secrets, which are often the lifeblood of the sensitive information covered in NDAs. Adopted by many states, this law sets rules for identifying, safeguarding, and enforcing trade secrets. NDA documents often include UTSA provisions to ensure that these valuable secrets are shielded from third parties.

2. Defend Trade Secrets Act (DTSA)

The Defend Trade Secrets Act  (DTSA), introduced in 2016, offers federal protection for trade secrets, complementing state laws like the UTSA. Here, the trade secret owners can seek remedies such as injunctions, damages, and legal fees. The DTSA even has a provision for emergency orders to stop stolen trade secrets from spreading. NDA documents often refer to the DTSA to make sure they're in line with federal trade secret laws.

3. Common law principles of contract and confidentiality

In addition to statutory laws like the UTSA and DTSA, unilateral NDAs are also shaped by  everyday legal principles of trust and privacy . These principles lay the groundwork for how contracts, including NDAs, are understood and upheld. They also recognize the importance of keeping sensitive information confidential, especially in relationships like between bosses and employees, even without a formal agreement. NDA documents often nod to these principles to make sure everyone's rights and responsibilities are crystal clear.

Elements of a unilateral non-disclosure agreement

Let's take a closer look at what makes up these confidentiality agreements:

1. Identifying the parties

In an NDA, it's important to know who's in the picture. The disclosing party is the one sharing the private information, while the receiving party is the one promising to keep it under wraps. This part should include the full names and contact information of both parties to make sure everyone knows who's who.

2. Defining the confidential information

The NDA needs to clearly state what kind of information is considered confidential and should be kept secret. By being clear about what's private, the NDA makes sure everyone knows what's covered by the agreement.

3. Understanding the “obligations of the receiving party”

The NDA should outline the responsibilities and necessities of the party who is receiving the information regarding the handling and protection of confidential data.

The NDA should lay out what the receiving party needs to do to keep the information safe. This might mean promising to keep things confidential, not sharing or using the info for anything unauthorized, and taking reasonable steps to make sure it stays protected. Plus, the receiving party might have to limit who can see the information and give it back or let go of it if the disclosing party asks or if the agreement is terminated.

4. Understanding what is “no reverse engineering”

Reverse engineering is like taking apart a puzzle to see how it works. The "no reverse engineering" rule in a Unilateral Agreement (NDA) is like saying, "hands off" to the receiving party.

This rule makes sure the receiving party can't try to copy or figure out the secret information by taking it apart or analyzing it. It's all about keeping things safe and secure.

5. Duration of the agreement

Think of the NDA like a clock—it needs to say how long it's ticking. Mention the period, like a year, or until the secret information isn't secret anymore. And if things go south, there should be a way to end it early, like if both sides agree or if someone breaks the rules.

6. Governing law and jurisdiction

In the non-disclosure agreement, specify the applicable rules and the venue for dispute resolution. This involves stating the governing laws and the courts responsible for resolving disputes that may arise.

7. Exclusions

"Exclusions" in a Unilateral NDA are specific types of information that don't count as secrets and don't have to follow the confidentiality rules in the agreement. Here are a few examples:

• Information already in the public domain : If information is already out there for everyone to see, it doesn't count as secret. No blame comes to the receiving party if it's already public.
• Information independently developed by the receiving party : If the receiving party figured out the information on their own without using the disclosing party's secrets, it's not covered by the NDA.
• Information received from third parties : If someone else gave the receiving party the information legally and without any strings attached, it's not part of the NDA.
• Information disclosed with consent : If the disclosing party said it's okay to share the information, then it's not a secret anymore. Both parties have to agree to share it for it to count.

Tips for drafting a comprehensive document

When it comes to drafting a Unilateral Agreement (NDA), you've got to think it through to make sure it's strong enough to keep your confidential information safe and keep trouble at bay. Here are some important tips to help you create a solid NDA:

1. Customize the agreement to the specific needs and circumstances of the parties involved

Each business relationship and secret shared is unique. Make sure the NDA fits like a glove, addressing the specific needs, worries, and hopes of both sides. Consider things like what's being shared, how you know each other, and why you're sharing it. Tailoring the agreement means it's more likely to work for everyone and keep their interests safe.

2. Seek legal advice

Bring in legal help who has expertise when it comes to contracts and protecting ideas. They'll help make sure the NDA follows the rules and covers all the bases. Consulting a legal counsel can save you headaches later on and make sure that everyone's protected as best as possible.

3. Clearly define terms

Confusion in the NDA language can lead to disagreements. Use plain, easy-to-understand terms like "confidential information," "disclosure," "use," "duration," and "termination." Give examples to show what you mean and avoid vague wordings. Clear language makes sure everyone knows what they're agreeing to and keeps things running smoothly.

4. Consider the scope of confidentiality

Think carefully about what information the NDA protects and what it doesn't. Spell out exactly what's considered private—like trade secrets or customer lists—and what's not, such as information already out there or shared with permission. By setting clear boundaries, you can make sure the NDA does its job of keeping secrets safe while still letting business happen.

Getting started with safeguarding your secrets is easy with the free Unilateral NDA template from LegalZoom—it's like having a trustworthy guide to help you protect your valuable assets and navigate the complexities of business relationships with confidence.

As businesses work with others and share secrets, using Unilateral NDAs is a must. They’re a way to build trust and keep relationships strong. So, whether big or small, businesses should make unilateral NDAs a part of their routine. It's not just about legal paperwork—it's about keeping secrets safe, staying ahead in the market, and building trustworthy relationships in today's fast-paced business world.

Frequently asked questions

What's a unilateral non-disclosure (nda) agreement.

A unilateral nondisclosure agreement, or unilateral NDA, safeguards confidential company information such as customer data, inventions, and secrets of trade. It clarifies what information is confidential and helps prevent accidental leaks of proprietary details, technology, and intellectual property.

By establishing clear guidelines for confidentiality, an NDA informs colleagues about what should be kept confidential, reducing the risk of the secrets of a trade falling into competitors' hands.

To complete a unilateral nondisclosure agreement effectively, you'll need the following information ready:

• Sender's information : Your name or your company's name and contact details
• Recipient's information : Name and contact details of the party being asked to sign the NDA
• Project details : Explanation of the project or arrangement involved with the second party
• Effective timing : Determination of the agreement's start date and any associated deadlines

What are the five key elements of a non-disclosure agreement?

The five key elements of a non-disclosure agreement (NDA) typically include:

• Identification of the parties
• Definition of confidential information
• Obligations of the receiving party
• Duration of the agreement
• Governing law and jurisdiction

What are the types of NDA?

Predominantly, NDAs are of three types:

Unilateral NDA : Also called a one-way NDA, when a deal happens and one side shares secrets with the other. The receiver pledges to keep the disclosed information private and not share it with outsiders or misuse it.

Mutual NDA : Also known as a two-way or bilateral NDA, this pact comes into play when both parties share information. Both sides agree to keep each other's secrets confidential and not share them with third parties or misuse them.

Multilateral NDA : In this agreement, multiple parties share confidential information among themselves while agreeing to keep it confidential. It's like a circle of trust where everyone keeps each other's secrets safe.

These NDAs serve different purposes and are used based on the specifics of the business relationship and the confidential information shared.

Related categories

Related templates.

Business Plan Non-disclosure Agreement

Safeguard your business ideas with a business plan non-disclosure agreement template. Ensure your confidential information stays protected when sharing with potential partners, investors, and banks.

Employee Non-disclosure Agreement

Keep your employees informed about what is confidential and can't be disclosed to third parties. Safeguard the proprietary information with an employee NDA and maintain trust in the people working for you.

Independent Contractor Unilateral Non-disclosure Agreement

Protect your proprietary information when working with contractors. An independent contractor unilateral NDA establishes clear boundaries and terms.

Joint Venture Agreement Amendment

Make changes to your joint venture terms with a joint venture agreement amendment. Modify your partnership terms efficiently and effectively.

Management Services Agreement

Protect your business and outline the responsibilities when working with an outside management firm. A management services agreement helps define work terms, responsibilities, payment, and reporting expectations.

Mutual Non-disclosure Agreement

Level up your business partnerships with a mutual non-disclosure agreement. Ensure confidentiality and protect your sensitive data while sharing it with third parties.

Non-disclosure agreements (NDAs): Guide for people professionals

Clear and practical advice on the proper use of non-disclosure agreements (NDAs) or confidentiality clauses and how to avoid inappropriate use

Non-disclosure agreements (NDAs) or confidentiality clauses can be used to ensure employees keep matters about their employment confidential. In recent years, the misuse of NDAs has come under scrutiny following revelations about their use to silence victims of sexual harassment. Various measures have been proposed to control the use of NDAs and prevent their abuse, and both Acas and the Equality and Human Rights Commission (EHRC) have published guidance on the topic.

NDAs can be useful for both employers and employees in certain circumstances, but it is vital to ensure that they are used legally and ethically. People professionals have a key role in ensuring that NDAs are not misused.

People professionals need to be aware of the serious potential misuse of NDAs and confidentiality clauses in relation to sexual harassment complaints. NDAs should never be used to cover up inappropriate behaviour and wrongdoing, or to stop claims of whistleblowing or other forms of discrimination.

People professionals have an important role to play in ensuring the ethical use of NDAs. This means influencing the organisation’s leadership, in that NDAs should never be used as a default option in bullying or harassment complaints, or to silence alleged victims. There needs to be oversight at the top of the organisation to ensure that NDAs are not used to push harassment issues under the carpet and avoid tackling unfair treatment.

On this page

• The law on NDAs
• When can NDAs be used?
• When can NDAs not be used?
• How to balance the interests of employees and the organisation

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