When to Use

  • You need to protect confidential information or trade secrets from unauthorized disclosure.
  • You want an agreement in place before discussing proprietary information in order to protect your business opportunities.
  • You want to create a standard one-way (unilateral) NDA, a mutual (bilateral) NDA, an employee NDA, or an independent contractor NDA.
  • You need strong legal protection that is customized to your circumstances.
  • You want the option of prohibiting solicitation of your customers and employees.

Other Names for This Document

  • Confidentiality agreement
  • NDA
  • Confidentiality clause
  • Proprietary information agreement

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Help Guide

A non-disclosure agreement (NDA) is used to keep your confidential information secret by preventing those who sign it from using or disclosing your information against your wishes. Our questionnaire allows you to create either a standard NDA (protecting one party’s information), a mutual NDA (protecting both parties’ information), an employee NDA, or an independent contractor NDA.

Confidentiality

Our NDA defines “confidential information” and “trade secrets” to include all of the most common categories of information people need to protect against unauthorized disclosures. The party receiving the confidential information will be required to use their best efforts to protect the information and must notify the disclosing party if it discovers any theft or improper use of the information. However, you can also list specific information that must be protected under the agreement if you need to customize your NDA further. While including this is not required, doing so will help show the parties’ intentions should there ever be a dispute.

Length of Obligations

The party receiving confidential information will have a duty to protect the information for as long as is necessary to protect the parties’ legitimate business purposes. It is recommended that you limit the length of the agreement to the least amount of time needed to accomplish this, as making the restriction too burdensome can result in it being challenged later. However, information like trade secrets often needs to be kept confidential forever, and therefore it makes sense to require the recipient to protect the information indefinitely.

Disclaimer of Warranties

It is common for the disclosing party to disclaim all warranties regarding the confidential information. This means that the recipient cannot file a legal claim against the disclosing party and try to invalidate the NDA if the confidential information contains errors. However, if the disclosing party is making express promises that the confidential information is completely accurate and free of mistakes—for instance, if the parties are contemplating a business relationship—then you would not want to disclaim all warranties.

Dispute Resolution and Governing Law

You will also need to decide how you want disputes to be resolved. Often, NDAs require parties to use mediation and/or arbitration instead of using the formal court system. In mediation, an independent mediator helps the parties discuss the dispute and hopefully reach a compromise. Arbitration is similar, but the arbitrator overseeing the dispute will issue a legally binding decision that parties must comply with. Mediators and arbitrators are normally attorneys that can help shed light on the legalities of the situation and have extensive experience in the areas of the law involved. Also, mediation and arbitration are usually much faster and cheaper than going through court.

Next, select the state law that will control the agreement. Often, this is the disclosing party’s principal place of business or state of incorporation. However, you may wish to use the state where the parties are conducting business together for convenience.

Additional Terms

When completing your NDA with LegalNature you will also have the option to add as many of your own custom terms as needed. This is helpful in instances when the parties want to record specific promises made or add additional protections unique to their dealings. It is a good idea to first preview the NDA to see what has already been included for you.

Executing Your Agreement

  • Each party must sign and date the agreement. The NDA allows use of electronic signatures. There is no need for both parties to put their original signatures on the same physical piece of paper, as signing a copy sent via email or fax is also permitted.
  • Each party should receive a copy of the final version of the agreement containing all the signatures.
  • You are all done! Consider periodically reviewing the terms of the agreement in order to ensure that the parties are meeting their obligations.

Ready To Get Started? Create a Non-Disclosure Agreement