There are many instances, professionally or personally where certain information that is being shared, should strictly remain between the parties involved. However, in such a situation, one cannot depend on verbal commitments as it has no legal values and certainly doesn’t provide any surety. So, to ensure that the information shared remains confidential, there is a requirement of a non-disclosure agreement or NDA, as it is commonly called.
Non-disclosure agreement or confidentiality agreement is a contract that is signed between two parties, one which will be sharing the trade secret or any other confidential information and the other party to whom the information will be disclosed to. The contract signed is mutually agreed and is enforceable by law.
Some of the other terminologies used for NDA are:
The sample confidentiality agreement can be broadly classified into the following:
The non-disclosure agreement pdf will usually serve 3 key functions that will ensure the protection of your confidential data, trade secrets or any other information. The key functions of NDA form include:
By signing on the simple non-disclosure agreement, the parties concerned are bound by law to maintain the confidentiality of the information disclosed. If by any chance, one party discloses the information to the other concerned party or any other person for that matter, the first party or the victim can sue the other party on the grounds of breach of contract.
The inventor of a new idea, product, or concept can sign a detailed NDA form that will help him to protect his patent rights. It is required because after the idea/concept/or product is launched into the market, it can nullify or void the patent rights. So, if the creator wants to hold on to the legal right of his invention, then a standard non-disclosure agreement is a must.
While working on many cases, it was found that at times, the organization does not clearly specify in the scope of the project what all information is confidential and exclusive while what can be divulged out to the other party concerned. In all such cases, the confidentiality agreement pdf provides a clear idea about the same.
The above-mentioned functions just give you a fair idea, the NDA practically is limitless. It covers varied things within its scope, for instance, the knowledge transfer within teams or organization, customer contact details, the software used, in-house process documentation, passwords and so on. In short, wherever or whenever there is a requirement of information protection, the non-disclosure agreement is a necessity.
There are no fixed features that every non-disclosure agreement sample needs to include, however; there are some features which are commonly seen in all the NDA. It includes:
Any sample non-disclosure agreement that you will come across will have the following elements:
The agreement must clearly specify all the information that it refers to as ‘confidential’. It can include information like financial statements, competition data, software, process details and so on. The information should be precise and clear.
It states the reason why the confidential information is shared with the other party. It explains the intent behind sharing the information so that both the parties respect the premises under which the information was disclosed.
NDA is signed between two parties, the one who discloses the sensitive information is known as “discloser” and the one receiving the information is termed as “recipient”. Both the parties involved in the contract must be very clear about their roles and responsibilities.
When the recipient clearly understands the intent of the discloser for sharing the information and understands the confidentiality of the matter. Then, he may choose to sign on disclosure, which means the recipient has agreed to keep the information secure. But, sometimes it adds unnecessary stress to the receiver; hence they may opt out of it and go for No Disclosure. In this, the recipient has the provision of “best effort clause” or a “need to know basis” or they are expected to treat the information like they would do to their own confidential information.
The agreement must clearly specify that the recipient cannot use the information for any other purpose than the one mentioned in the contract. If in case, he wishes to reuse the information or data in any form, they must seek written consent from the concerned party.
In most of the confidentiality agreement template, the limitations are clearly specified, which means all the information that will not be counted as secret. It will also include certain circumstantial exclusions, for the cases when the recipient already had the stated ‘confidential information’ before signing the contract. For instance, if an employee already knows a certain skill, which is a part of NDA form in the current company, then his skills will not come under NDA, as he knew about it before entering the current organization.
The receiving party is not allowed to disclose the information by leaking the information, or by using any unethical ways.
Any confidentiality agreement template will have a clearly specified time limit. For instance, in U.S agreements usually lasts for 5 years but can sometimes close in even 2 to 3 years. However, European countries go for 10 years on an average and some of the NDA are timeless means they do not have a termination date.
The contract considers all the possible legal aspects of the agreement. For example, who pays the legal fees? Where will all the legal proceedings take place? What will happen in the event if the part of the agreement turns invalid? In case of breach of contract, which state jurisdiction will be followed? All the queries concerning the legal formalities will be included in this section.
The recipient cannot add/delete/modify any portion of the contract without the written consent from the employer.
In certain circumstances, the recipients are indemnified from the NDA contract. These circumstances include- intervention from the legal or government department or if in case any lawyer is seeking information to the related case.
The confidentiality agreement must be signed in case you fall under the following:
Here are the conditions when the confidentiality agreement does not remain valid:
The organization enjoys the following benefit by signing on a detailed confidentiality agreement pdf:
If the recipient violates the contract, then the discloser can take the following action, under breach of contract: