Free Non-Disclosure Agreement Template
A Non-Disclosure Agreement (NDA), also referred to as a confidentiality agreement, is a legally binding contract that establishes a confidential relationship between two parties. The party or parties signing the agreement agree not to disclose specific information they’ve shared for a particular purpose or use.
NDAs are commonly used to protect sensitive information, intellectual property, trade secrets, business strategies, and other proprietary data.
Why Use a Non-Disclosure Agreement?
In the course of business or personal transactions, sharing information is inevitable. Whether you are discussing a potential partnership, engaging in a new business deal, or hiring a new employee, the need to divulge certain confidential information arises.
An NDA protects this information by legally obligating the receiving party to keep it confidential and not to use it for any unintended purpose. Breaching such an agreement can lead to legal repercussions, thereby ensuring an added layer of security.
What Information Can an NDA Protect?
An NDA serves as a protective barrier for a vast array of information, including but not limited to:
- Trade Secrets: Techniques, formulas, processes, and any other information that gives a business advantage over competitors who do not know or use it.
- Business Strategies and Plans: Future plans, marketing strategies, and unpublished financial data.
- Technical Data: Software source codes, architectural designs, and proprietary algorithms.
- Client and Supplier Information: Lists of clients and suppliers, along with associated contracts and transaction histories.
- Intellectual Property: Unpatented inventions, unpublished works, and other intellectual creations that one might not want to be public knowledge.
What Information Isn’t Covered by an NDA?
While NDAs are powerful tools, they have limitations on the scope of protection:
- Publicly Known Information: Any information already available to the public cannot be considered confidential under an NDA.
- Independently Discovered Information: If the receiving party independently discovers or develops the information without reference to the disclosed confidential data, it isn’t protected.
- Subsequent Public Releases: If the disclosing party later releases the information to the public, it’s no longer covered by the NDA.
- Legally Required Disclosures: Information that must be disclosed due to legal, regulatory, or court orders is exempt. However, most NDAs require the receiving party to notify the disclosing party before such a disclosure, providing them a chance to contest or limit the release.
It’s worth noting that the specific exclusions might vary based on the wording of the NDA and the jurisdiction under which it’s enforceable. Always consult with legal professionals to clearly understand the scope and limits of your NDA.
Key Components of an NDA
When drafting or reviewing a Non-Disclosure Agreement, it’s essential to ensure that it captures the core elements that define its scope and enforceability. The primary components to consider include:
- Definition of Confidential Information: Clearly delineate what qualifies as confidential to avoid ambiguities. For example, instead of the vague “business practices”, opt for specifics like “supplier lists” or “marketing strategies.”
- Obligations of the Receiving Party: Define the responsibilities, such as prohibiting the sharing of information and ensuring its secure handling.
- Duration: Indicate a clear time frame for the confidentiality, ensuring the receiving party knows how long they’re bound by the agreement.
- Exclusions: List any information that’s not covered by the NDA, such as publicly available data or information independently discovered.
By focusing on these primary components, you can create a robust and comprehensive NDA that offers clarity and protection for all parties involved.
How to Fill Out and Use the Free Non-Disclosure Agreement Template
Step 1: Define the Effective Date
Start by entering the date when the agreement will come into effect. This is often the date when both parties sign the agreement, but it can also be a future date if both parties agree upon it.
Step 2: Identify Both Parties
- For the section labelled
[DISCLOSING PARTY], enter the full legal name of the individual or entity that will be sharing confidential information.
- For the
[RECEIVING PARTY]section, input the full legal name of the individual or entity that will be receiving the confidential details.
Step 3: Understand and Detail Confidential Information
Go through the “Definition of Confidential Information” section to understand the type of information that will be deemed confidential. If there are specific items or categories that you want to highlight, ensure that they fit within this definition. If the disclosing party is sharing written materials, they must label them as “Confidential” or provide a subsequent written notification if the disclosure was oral.
Step 4: Familiarize Yourself with Exclusions
Review the “Exclusions from Confidential Information” section. This segment provides clarity on the types of information that are not protected by the NDA. It’s vital for both parties to understand these exclusions to prevent misunderstandings or disputes.
Step 5: Adhere to Receiving Party’s Obligations
The section titled “Obligations of Receiving Party” details the responsibilities of the party getting the confidential information. It’s important to review this section carefully and ensure compliance. The receiving party might need to introduce measures to restrict access to the data and might have to get other involved individuals or entities to sign similar NDAs.
Step 6: Note the Time Periods and Termination Conditions
Review the “Time Periods” section to understand the duration of the agreement and under what conditions the NDA can be terminated or when the obligations cease.
Step 7: Sign and Date the Agreement
Once both parties have reviewed, understood, and agreed upon the terms presented:
- The disclosing party should sign under
[DISCLOSING PARTY], and print their name, title, and address in the spaces provided.
- The receiving party should do the same under the
After both parties have signed the agreement, it’s advisable to have copies made for both the disclosing and receiving parties to keep for their records. This ensures that both parties have access to the terms and conditions agreed upon should any disputes arise.