How to Create a Non-Disclosure Agreement

Use a non-disclosure agreement to prevent others from disclosing your confidential information or trade secrets to third parties or using it for their own benefit. This agreement uses a comprehensive definition of "Confidential Information" and "Trade Secrets" to ensure any and all of your proprietary information remains well protected. In addition, the non-disclosure agreement will include the following provisions and options:

  • The obligation to protect against the unauthorized disclosure and theft of confidential information or trade secrets by third parties
  • The Discloser’s ownership of all intellectual property created by the Recipient as a result of receiving the confidential information, including copyrights, trademark, and patent rights
  • Prevention of any reverse engineering by the Recipient
  • The requirement for the Recipient to disclose any and all conflicts of interest
  • Options to include an arbitration provision as well as fully customizable clauses to reflect the full intentions of the parties

The following are some of the items that will be included if you use our customizable non-disclosure agreement template.

Party Information

You will begin this document by first specifying the parties involved. Identify who will be disclosing the confidential information (the “Discloser”) followed by the information for the Recipient. A party can be an individual or business entity, but be sure to give each party’s full legal name.

Effective Time Period

Next you will specify when you want the non-disclosure agreement to go into effect and for how long you want the Recipient’s duty of confidentiality to last. Often the Discloser will want the Recipient’s duty to last indefinitely. This means that the Recipient will be required to maintain confidentiality even after the termination of any business relationship between the parties. If this seems unreasonable under the circumstances, the parties can always opt for a shorter time period.

Warranty Disclaimer and Arbitration

After that, you will need to specify whether or not the Discloser wants to disclaim all warranties as to the confidential information. This means that the Discloser cannot be held liable should some of the confidential information or trade secrets communicated to the Recipient turn out to be erroneous or should the Discloser end up not using the information as planned. Typically, the Discloser will choose to disclaim all warranties unless express promises were made to the Recipient as to the accuracy or future use of the information.

The parties will also have the option of requiring disputes to go to binding arbitration instead of through the court system. This allows the parties to resolve disputes a lot faster and for a fraction of the cost of going through court. If a dispute occurs, it will be submitted to either a single arbitrator or an arbitration panel in the city chosen in the agreement. For these reasons, it is usually a good idea to include an arbitration provision unless you have a specific reason not to do so.

Final Matters

To wrap up the document you will specify which state’s laws you wish to govern the agreement as well as any other additional terms you want to include. Usually, the Discloser lists its principal place of business as the governing state. Other options would be to use the Discloser’s state of incorporation or the state where the two parties are conducting any business together. You can then add any other terms and conditions desired. This allows you complete flexibility to tailor the document to reflect the specific situation and true intent of the parties.

Be sure to preview the non-disclosure agreement first so that you know what has already been included. After that, just follow the instructions at the end of the document to formally execute it and make sure all parties get a copy of the final version. Presto, you’re done!

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Use our customizable NDA template to create a non-disclosure agreement now.