Non-Disclosure Agreement Form

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A non-disclosure agreement (NDA), also known as an NDA or a confidentiality agreement, is a contract that prevents one party from releasing secret information binds a recipient of secret information, including trade secrets or proprietary business information, to outside parties. If the party violates the non-disclosure agreement, they could be liable for damages.

non-compete agreement should often be used with an NDA to prevent a business or individual from performing competitive activities in the same industry.

What is a Non-Disclosure Agreement (NDA)?

A non-disclosure agreement (NDA), also called a confidentiality agreement,  is a legally enforceable agreement that establishes confidentiality between the owner of the confidential information and the recipient.

There are two types of NDAs: A mutual non-disclosure agreement (also known as a bilateral NDA) means that both sides share sensitive information related to business practices with each other. Both parties are bound to keep that information confidential. With a non-mutual NDA, which is also referred to as a unilateral NDA, only one side shares information, and the recipient of that information is bound to confidentiality.

What Are Some Situations Where I Should Use An NDA?

A well crafted NDA helps protect sensitive information from disclosure, and also explicitly outlines what information is confidential vs what can be disclosed. Here are some common situations in which an NDA may be used to protect one or both parties.

Employees: Employees may need access to sensitive company information to do their jobs. The employee typically signs before they start their job. The NDA makes the employee promise that they will maintain the secrecy of company-specific activities that are considered a trade or business secret. It may also include a provision that says if the employee leaves, they cannot disclose such information for a specific period of time.

Business Transaction: An NDA for a business purchase or business sale is used when the seller will disclose information (this may also include financial information, customer lists, and pricing) about the business before the sale is finalized. Sometimes, showing this information, and how it is used in the business, can facilitate the sale.

Joint Venture And Partnerships: An NDA for a joint venture or partnerships allows the potential partners to share confidential business information with one another so that they can make the best decision about whether to go into business together.

Inventions: This is typically used when someone is looking for a commercial partner after they’ve invented something. This protects the inventor from having the idea, intellectual property, know-how, or prototype stolen.

Commercial Real Estate Transaction: This NDA allows the seller to share information regarding a commercial property with a prospective buyer or tenant.

What Is Typically Considered Confidential Information?

Common information covered in an NDA may include:

  • client information, such as names and key relationships.

  • trade secrets, such as confidential information about partnership terms.

  • investment strategy, which may include deal points and financial models.

Other common areas that are covered include: a unique invention or patented idea, a marketing plan, a plan for a new manufacturing process, a document that is being prepared for publication, or test results revealed to lab workers. 

NDAs typically do NOT cover:

  • Information that is already in the public domain

  • Information received legally by an unrelated third party

  • Information where the parties agree in writing that there are no confidentiality provisions.

When Should You Not Sign an NDA?

  • Don’t sign an NDA if the terms aren’t clearly explained. Remember that confidential information, as well as business secrets, must be explained so that you understand exactly what is considered confidential.

  • Don’t sign an NDA that doesn’t clearly define a reasonable timeframe (e.g. one year) for enforcement. While 1-2 years is common, there is room for flexibility here. 

When Is It Permissible to Break an NDA?

You can break an NDA any time you want, but there may be consequences similar to breaking any legal contract. Breaking it can result in you being sued for breach of contract. You may be required to pay damages.

There are also times when an NDA is considered null or void. Of course, one of the most common ways that an NDA is null or void is because it doesn’t conform to local law. You should always speak to a lawyer prior to breaking an NDA.

Legal Forms Related to a Power of Attorney

  • Living Will: A Living Will is a legal document that provides detailed, written instructions for your medical care if you become unable to make decisions on your own behalf. 

  • Last Will and Testament: A Last Will and Testament is a legal form that determines how an individual’s assets, such as property, will be passed on to family members and assigned individuals upon one’s death

  • Codicil: A Codicil is a legal document that allows an individual to make updates and changes to a last will and testament.

Download a PDF or Word Template

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Sample Non-Disclosure Agreement


Sample Non-Disclosure Agreement

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