Signing Parties:
Identify exactly which entities are bound by the terms of the agreement. Use the full legal names of all individuals and organizations.
Type of NDA: NDAs can take several formats, including:
Unilateral: One party (the “disclosing party”) releases confidential information to the other party (the “receiving party”).
Bilateral: Both parties agree to exchange confidential information with each other.
Multilateral: Three or more parties anticipate some kind of sharing agreement for confidential information between all of them
Definition of Confidential Information:
This is one of the most important sections of the document. You need to specify exactly what you consider “confidential information” so that the terms of the agreement are valid. For example, a restaurant’s definition of confidential information might include lists of customers, payment card data, recipes and f inancial reports. You must also exclude certain information from this definition, such as information that’s already public or that the recipient already has.
Stated Purpose:
The document should explicitly say for what purposes information is being shared and restrict its use to only the provided reasons. For example, if two companies are considering a merger, then the confidential information that they share (such as financial reports) should be used only for each party to make the final decision about the merger
Confidentiality Safeguards:
The disclosing party should clearly denote whether information that it sends to the receiving party is confidential or not. The receiving party must take reasonable measures to protect the confidentiality of the information, such as strong IT security. In addition, the disclosing party may wish to take certain measures, such as audits, to ensure that the receiving party is not inappropriately sharing the information
Start and End Dates of the Partnership:
Your NDA can’t take effect if you never specify the agreement’s start or end dates. The start date should be on or before the day that the parties began to exchange confidential information.
Length of Time for Secrecy:
If your partner can spill the beans immediately after ending the business relationship, your NDA won’t be very effective. Most NDAs remain in force for a period of at least several years after the relationship concludes, but this may vary depending on what type of information you share. Confidential information about certain technologies may be worthless after a year or two, while other information remains valuable for much longer.
Disclosure of the Agreement:
Some NDAs are self-referencing - they prohibit the signers from acknowledging that they’ve even signed the document. Decide whether you want to add such a clause.
Jurisdiction:
An NDA is useless if it’s not valid in the jurisdiction in which it’s meant to take effect. You should clearly define which city or state will handle disputes and legal cases.
Termination:
What are the conditions that lead to the agreement’s termination?
What happens if any party wants to leave early?
How will the parties return confidential information to each other?
What are the receiving party’s obligations to the disclosing party once the agreement is no longer in effect.
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