Make a Delaware Non-Disclosure Agreement

Delaware State Laws

Non-disclosure agreements are regulated by Del. Code tit. 6 . When writing a Delaware non-disclosure agreement it is important to include a “Choice of Law” or jurisdiction clause to limit the NDA to the Delaware court system.

Delaware non-disclosure agreements are often upheld by the State’s court system to protect the use of confidential information. However, it is important that the agreement follows state law and has reasonable limitations within it in regards to time frame, geographical limits, and restrictions created on the signer. This is another reason why it can be beneficial to speak with a qualified law firm to ensure that your NDA is written in a way that will best protect your interests as well as the use of confidential information from misappropriation.

A Delaware NDA is generally used with a Delaware non-compete agreement to help protect the best interests of the business hiring new employees or contractors.

Definition of “Trade Secrets”

Because the purpose of an NDA is to protect trade secrets, Delaware defines “trade secrets.” A trade secret is a formula, pattern, compilation, program, device, method, technique, or process that has actual or potential economic value. However, this information cannot be generally known to the public or something that others in the industry could easily come up with.

Businesses must also put forth a reasonable effort to keep that information secret.

How to Write a Delaware Non-Disclosure Agreement

To create a Delaware non-disclosure agreement, first review Delaware law. However, there is simply no substitute for obtaining legal advice for your specific business needs. A law firm can help you draft an appropriate NDA or review the one you create to ensure that it is within the parameters of Delaware law. If you were presented with an NDA to sign, you should have it reviewed before you sign it.

• The opening paragraph identifies the Disclosing Party (you and your business) along with your full address and the Receiving Party (the new employee, independent contractor, other individual, or other business) and their full address, as well as identifies the purpose of the document (which is to prevent the unauthorized disclosure and use of trade secrets and confidential information). You should also include an effective date for the contract.
• A definition of trade secrets according to Delaware law. Delaware law states that trade secrets are formulas, patterns, compilations, programs, devices, methods, techniques, or processes with actual or potential economic value. It cannot be something that is easily known to the public or something that others within the industry could easily come up with on their own. Your business must take reasonable efforts to protect the information.
• An explanation of what is not considered confidential information. For example, information that is disclosed at no fault of the receiving party, something that is created or discovered by the receiving party before it was told to the disclosing party, something learned by the receiving party by legitimate means other than because of the disclosing party or because of their agents, or shared by the receiving party with written approval by the disclosing party.
• An explanation of the receiving party's obligations. Some examples include maintaining trade secrets and confidential information in the strictest of confidence, ensuring that access to the information is restricted without the prior written approval of the disclosing party, and not using trade secrets or confidential information for their benefit without the prior written approval of the disclosing party.
• A relationship clause. In some NDA agreements, a relationship clause is essential. It states that nothing within the agreement deems that either party becomes a partner, joint venturer, or employee of the other for any purpose.
• A jurisdiction clause. As mentioned earlier, a jurisdiction clause is used to state that Delaware law is used to interpret the agreement and to determine the outcome of any disagreements related to the NDA.
• A severability clause. This clause is used to state that if one clause in the NDA is determined to be invalid that the remainder of the contract will be valid.
• An integration clause. This clause states that the parties agree that the NDA overrides all previous proposals, agreements, representations, and understandings related to the subject matter in the NDA. It should also state that it may not be amended except in writing and only then if the parties sign the document.
• A waiver clause. This clause states that if either party fails to exercise any rights presented by the NDA, they do not waive prior or subsequent rights.

Lastly, include space for signature lines and for space to print the names. There should also be space to print the roles of each person (Disclosing Party and Receiving Party). Include a place for the date that each person signs the document. Each party should receive a copy of the executed document for the records.