Non-Disclosure Agreement (NDA) Template

Continue reading to see samples of common (and necessary) clauses in non-disclosure agreements.

How to Write an NDA: Common Clauses

You may want to fill in or write your own non-disclosure agreement. Here are the standard clauses you should include, and what they mean:

1. Disclosing and Receiving Parties

Start your NDA by establishing the “Parties” to the agreement. The “Disclosing Party” is the individual or entity sharing information, while the “Receiving Party” is the individual or entity receiving information.

Here’s an example of how to start an NDA and establish the Parties to the agreement. Notice that the sample NDA clause also specifies what transaction or relationship the NDA relates to:

2. Confidential Information

After the Parties have been established, specify what confidential information is protected by the non-disclosure agreement.

Common examples of NDA-protected confidential information include:

Trade secrets

Business Ventures

Creative Endeavors

Other

These are only a few examples of the types of information you wish to keep confidential under the protection of your NDA. Your agreement can list as many or few items of confidential information as needed, but you need to be specific about what information the Receiving Party is not permitted to disclose.

3. Exclusions from Confidential Information

An “Exclusions” clause defines what kind of information is not protected by the NDA.

Information that can’t be protected by a non-disclosure agreement includes:

• information already in the public domain
• information the other party already has access to prior to the NDA
• information that is independently developed or discovered by the recipient
• information that the Disclosing Party has authorized the Receiving Party to share with prior written consent

Here’s an example of what your Exclusions clause should look like:

4. Non-Disclosure Obligations

The bulk of your NDA will be made up of Non-Disclosure Obligations, which outlines what obligations the Receiving Party has to the Disclosing Party’s information.

Rather than being a single clause, this section will likely be comprised of multiple clauses that detail various obligations.

This section will start with a clause like in the example below, which states the broad obligation of the Receiving Party to keep the confidential information quiet.

You can add additional clauses to this section of your NDA, depending on your needs. Here are some other clauses you may choose to include in your Non-Disclosure Obligations section:

1. Non-Disclosure of Transaction: the Receiving Party promises to not let others know that:

• the Disclosing Party has shared or used Confidential Information.
• a Transaction is being discussed or negotiated.
• a Transaction has taken place, including the details of the relationship.

2. Non-Solicitation: either party may prevent the other from soliciting or offering employment to the other party’s employees, or from diverting business away from the other party.

3. Non-compete: Parties agree not to engage in business activities that directly compete with the other Party.

4. Non-Circumvention: if the Disclosing Party is sharing business contacts, a non-circumvention clause prevents the Receiving Party from bypassing the agreement and directly doing business or engaging with those contacts.

In the NDA sample below, you can see how these clauses may look in an agreement:

These are only a few examples of Obligations clauses you may choose to include in your NDA.

5. Time Frame / Termination

The NDA should explicitly state how long it remains in effect. The Time Frame includes when the promise to keep confidential information secret begins (the “Effective Date”), and the duration in which the protected information must not be shared with others (the “Disclosure Period”).

Usually, the Parties agree to when the term of the agreement will end (known as the “Termination” provision). For example, the non-disclosure agreement could terminate when:

• the Agreement expires
• the Transaction is completed; or
• a specific time period has passed.

6. Jurisdiction

The Jurisdiction clause establishes which state’s laws govern the non-disclosure agreement. If confidential information is leaked or inappropriately used by one party and a lawsuit ensues, the laws of the agreed-upon state will apply, and any trials or hearings will take place in that state.

7. Signatures

Finally, your NDA needs to include the signatures of all Parties and their Representatives.

Representatives are other people (i.e., directors, officers, employees, agents, or advisors) who may share, receive, or protect information in pursuit of the Transaction specified in the NDA.

Here’s an example of the Disclosing Party’s signature section:

Directly below this is the Receiving Party’s signature section, which is identical.

8. Additional Clauses

Depending on the nature of the transaction, relationship, and information being specified, every NDA will end up looking different. There are additional clauses you may choose to include in your own non-disclosure agreement:

• Remedies: specifies the consequences of breaking the NDA
• No License: provides that the NDA doesn’t give either party any patent, copyright, or ownership of the information provided.
• Severability: states that if one part of the NDA is ruled invalid in court, that part will be removed, and the rest of the agreement remains valid.
• Amendments: notes that the NDA may be amended at any time.