Writing a non-disclosure agreement yourself boils down to identifying the elements it should contain and adjusting them to your needs. Here, we’ll delve into the usual ones. You don’t have to include them all. You just have to ensure that they bring the desired outcome – your confidential information remaining secret.
1. Disclosing and Receiving Parties
Start by identifying the disclosing and receiving parties. If you are drafting the contract based on a non-disclosure agreement template, request the information of the other party and fill it in. The identifying information includes the name, mailing address, email address, and other information for identifying a person. When signing a contract with a company, include the business name, business address, mailing address, and possibly tax ID number.
Add your information as well.
2. Confidential Information
This is the most important part of your non-disclosure agreement. Describing the confidential information clearly ensures that the other party and, eventually, the judge would understand what information was meant to be confidential. Failure to do this properly may mean that your business is not protected despite signing the contract. It is recommended to have a sample non-disclosure agreement where the confidential information will be clearly drawn out, and your partners or contractors sign it.
3. Exclusions from Confidential Information
Parties have the flexibility to exclude some information from the scope of the non-disclosure agreement. The most common exclusions include publicly available information, information the receiving party knew about before signing the agreement, mandatory disclosures of confidential information to government and law enforcement bodies, and others. This is what you may have in your non-disclosure agreement template.
But, sometimes, circumstances call for negotiating additional exclusions. The receiving and the disclosing party have the freedom to add mutually agreed exclusions in their contract to fit their specific needs.
4. Non-Disclosure Obligations
The non-disclosure obligations are an essential part of your sample non-disclosure agreement. The most common ones include specifying the duty of confidentiality, how to care for the received information, what security measures to implement, when and how to return or destroy it, notification in case someone gets unauthorized access, prohibition for the receiving party to use the information for their own purposes, and others. Parties have the flexibility to choose which ones suit their needs best.
5. Time Frame & Termination
The time frame defines how long the receiving party must keep information confidential. Oftentimes, the agreement expires when the confidentiality duty expires, but in some cases, the parties may prescribe different termination conditions. Some non-disclosure agreement templates include a survival clause, which means that specific provisions of the agreement will still be in effect even after its expiry.
Choosing the jurisdiction that applies to your sample non-disclosure agreement is essential for the complete protection of your business. Different states and countries have different regulations about contracts.
For example, a requirement for reasonable care in a non-disclosure agreement governed under the Illinois Uniform Trade Secrets Act may be scrutinized by the courts in the absence of a precise definition of what reasonable care is. On the other hand, the Delaware Uniform Trade Secrets Act allows Delaware courts to interpret reasonable care as care that the receiving party would give to their own confidential information. That’s why the choice of jurisdiction is essential for contracts.
Written agreements must be signed by parties to be valid. Non-disclosure agreement templates, once customized, must be signed by the receiving and the disclosing parties to come into effect. The signatures are often formatted as a block with lines that include the parties’ names, the date of signing, and space for the actual signature. Parties can sign the documents electronically if the chosen jurisdiction recognizes electronic signatures.
8. Additional Clauses
Standard non-disclosure agreements often include some additional clauses. For example, many include a Force Majeure clause, which applies in case of a fire, flood, earthquake, terrorist attack, or something else beyond your control. Another common addition is the survival clause, which defines what provision remains in effect upon the expiry of the time period for which the receiving party must keep the information confidential. Other common additional provisions in a non-disclosure agreement include waiver, entire agreement clause, and others.