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A Non-Disclosure Agreement (NDA) is a legally enforceable contract that establishes confidentiality between two parties—the owner of protected information and the recipient of that information. By... Read more

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Sample Non-Disclosure Agreement

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NON-DISCLOSURE AGREEMENT


This Non-disclosure Agreement (this "Agreement") is made effective as of (the "Effective Date"), by and between (the "Owner"), of , , , and (the"Recipient"), of , , .


The Owner has requested and the Recipient agrees that the Recipient will protect the confidential material and information which may be disclosed between the Owner and the Recipient. Therefore, the parties agree as follows:


  1. I. CONFIDENTIAL INFORMATION. The term "Confidential Information" means any information or material which is proprietary to the Owner, whether or not owned or developed by the Owner, which is not generally known other than by the Owner, and which the Recipient may obtain through any direct or indirect contact with the Owner. Regardless of whether specifically identified as confidential or proprietary, Confidential Information shall include any information provided by the Owner concerning the business, technology and information of the Owner and any third party with which the Owner deals, including, without limitation, business records and plans, trade secrets, technical data, product ideas, contracts, financial information, pricing structure, discounts, computer programs and listings, source code and/or object code, copyrights and intellectual property, inventions, sales leads, strategic alliances, partners, and customer and client lists. The nature of the information and the manner of disclosure are such that a reasonable person would understand it to be confidential.


    1. A. "Confidential Information" does not include:


      • - matters of public knowledge that result from disclosure by the Owner;


      • - information rightfully received by the Recipient from a third party without a duty of confidentiality;


      • - information independently developed by the Recipient;


      • - information disclosed by operation of law;


      • - information disclosed by the Recipient with the prior written consent of the Owner; and any other information that both parties agree in writing is not confidential.


  2. PROTECTION OF CONFIDENTIAL INFORMATION. The Recipient understands and acknowledges that the Confidential Information has been developed or obtained by the Owner by the investment of significant time, effort and expense, and that the Confidential Information is a valuable, special and unique asset of the Owner which provides the Owner with a significant competitive advantage, and needs to be protected from improper disclosure. In consideration for the receipt by the Recipient of the Confidential Information, the Recipient agrees as follows:


    1. No Disclosure. The Recipient will hold the Confidential Information in confidence and will not disclose the Confidential Information to any person or entity without the prior written consent of the Owner.


    2. No Copying/Modifying. The Recipient will not copy or modify any Confidential Information without the prior written consent of the Owner.


    3. Unauthorized Use. The Recipient shall promptly advise the Owner if the Recipient becomes aware of any possible unauthorized disclosure or use of the Confidential Information.

    4. Application to Employees. The Recipient shall not disclose any Confidential Information to any employees of the Recipient, except those employees who are required to have the Confidential Information in order to perform their job duties in connection with the limited purposes of this Agreement. Each permitted employee to whom Confidential Information is disclosed shall sign a non-disclosure agreement substantially the same as this Agreement at the request of the Owner.


  3. UNAUTHORIZED DISCLOSURE OF INFORMATION - INJUNCTION. If it appears that the Recipient has disclosed (or has threatened to disclose) Confidential Information in violation of this Agreement, the Owner shall be entitled to an injunction to restrain the Recipient from disclosing the Confidential Information in whole or in part. The Owner shall not be prohibited by this provision from pursuing other remedies, including a claim for losses and damages.


  4. NON-CIRCUMVENTION. For a period of five (5) years after the end of the term of this Agreement, the Recipient will not attempt to do business with, or otherwise solicit any business contacts found or otherwise referred by Owner to Recipient for the purpose of circumventing, the result of which shall be to prevent the Owner from realizing or recognizing a profit, fees, or otherwise, without the specific written approval of the Owner. If such circumvention shall occur the Owner shall be entitled to any commissions due pursuant to this Agreement or relating to such transaction.


  5. RETURN OF CONFIDENTIAL INFORMATION. Upon the written request of the Owner, the Recipient shall return to the Owner all written materials containing the Confidential Information. The Recipient shall also deliver to the Owner written statements signed by the Recipient certifying that all materials have been returned within five (5) days of receipt of the request.


  6. RELATIONSHIP OF PARTIES. Neither party has an obligation under this Agreement to purchase any service or item from the other party, or commercially offer any products using or incorporating the Confidential Information. This Agreement does not create any agency, partnership, or joint venture.


  7. NO WARRANTY. The Recipient acknowledges and agrees that the Confidential Information is provided on an "AS IS" basis. THE OWNER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE CONFIDENTIAL INFORMATION AND HEREBY EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL THE OWNER BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THE PERFORMANCE OR USE OF ANY PORTION OF THE CONFIDENTIAL INFORMATION. The Owner does not represent or warrant that any product or business plans disclosed to the Recipient will be marketed or carried out as disclosed, or at all. Any actions taken by the Recipient in response to the disclosure of the Confidential Information shall be solely at the risk of the Recipient.


  8. LIMITED LICENSE TO USE. The Recipient shall not acquire any intellectual property rights under this Agreement except the limited right to use as set forth above. The Recipient acknowledges that, as between the Owner and the Recipient, the Confidential Information and all related copyrights and other intellectual property rights, are (and at all times will be) the property of the Owner, even if suggestions, comments, and/or ideas made by the Recipient are incorporated into the Confidential Information or related materials during the period of this Agreement.


  9. INDEMNITY. Each party agrees to defend, indemnify, and hold harmless the other party and its officers, directors, agents, affiliates, distributors, representatives, and employees from any and all third party claims, demands, liabilities, costs and expenses, including reasonable attorney's fees, costs and expenses resulting from the indemnifying party's material breach of any duty, representation, or warranty under this Agreement.

  10. ATTORNEY'S FEES. In any legal action between the parties concerning this Agreement, the prevailing party shall be entitled to recover reasonable attorney's fees and costs.


  11. TERM. The obligations of this Agreement shall survive  from the Effective Date or until the Owner sends the Recipient written notice releasing the Recipient from this Agreement. After that, the Recipient must continue to protect the Confidential Information that was received during the term of this Agreement from unauthorized use or disclosure indefinitely.


  12. GENERAL PROVISIONS. This Agreement sets forth the entire understanding of the parties regarding confidentiality. Any amendments must be in writing and signed by both parties. This Agreement shall be construed under the laws of the State of . This Agreement shall not be assignable by either party. Neither party may delegate its duties under this Agreement without the prior written consent of the other party. The confidentiality provisions of this Agreement shall remain in full force and effect at all times in accordance with the term of this Agreement. If any provision of this Agreement is held to be invalid, illegal or unenforceable, the remaining portions of this Agreement shall remain in full force and effect and construed so as to best effectuate the original intent and purpose of this Agreement.


  13. WHISTLEBLOWER PROTECTION. This Agreement is in compliance with the Defend Trade Secrets Act and provides civil or criminal immunity to any individual for the disclosure of trade secrets: (i) made in confidence to a federal, state, or local government official, or to an attorney when the disclosure is to report suspected violations of the law; or (ii) in a complaint or other document filed in a lawsuit if made under seal.


  14. SIGNATORIES. This Agreement shall be executed by , on behalf of

and and delivered in the manner prescribed by law as of the date first written above.


OWNER:


By:


By: Date:



RECIPIENT:


By:


By: Date:


Making a Non-Disclosure Agreement

  • What is a Non-Disclosure Agreement?

    A Non-Disclosure Agreement (NDA) is a legally enforceable contract that establishes confidentiality between two parties—the owner of protected information and the recipient of that information. By signing an NDA, participants agree to protect confidential information shared with them by the other party. In addition to not divulging or releasing the information without consent, the recipient also agrees not to copy, modify, or make use of the information in any way that is not authorized by the owner.

    Cases in which confidential information might be protected through an NDA can include:

    • Business models to be presented to a venture group for possible funding.

    • Plans for a new tool to be produced by a fabrication shop.

    • Information about clients or customers for a specific company.

    • Lab workers who have access to test results before patients.

    • Embargoed news releases or reviews.

    • NDAs are an almost surefire way to confirm that confidential information stays protected in a variety of situations. It's important to be aware of how these legal agreements work before signing or creating a document, as being well informed can help you make the best legal decisions now and down the road.

  • What is the purpose of a Non-Disclosure Agreement?

    A signed Non-Disclosure Agreement (NDA) can help you avoid a lot of problems as a business owner. Without an NDA in place, your confidential information can be disclosed publicly or otherwise used by employees, vendors, clients, or anyone else with whom you share the information. A Non-Disclosure Agreement lets the recipients of your proprietary information know that you expect confidentiality and it authorizes you to take legal action if the contract is violated.

    Confidentiality agreements typically serve three key functions:

    1. NDAs protect sensitive information. By signing an NDA, participants promise to not divulge or release information shared with them by the other people involved. If the information is leaked, the injured person can claim breach of contract.

    2. In the case of new product or concept development, a confidentiality agreement can help the inventor keep patent rights. In many cases, public disclosure of a new invention can void patent rights. A properly drafted NDA can help the original creator hold onto the rights to a product or idea.

    3. Confidentiality agreements and NDAs expressly outline what information is private and what's fair game. In many cases, the agreement serves as a document that classifies exclusive and confidential information.

    Confidential information typically can include items such as:

    • Business records and plans.

    • Financial information.

    • Trade secrets and original research.

    • Inventions and product ideas.

    • Technical data or designs.

    • Contract details or partner lists.

    • Sales leads and customer or client details.

    • Pricing or discount structure.

    Confidential information generally does not include:

    • Information that is already public knowledge.

    • Information lawfully received from a third-party.

    • Information that is independently developed or discovered by the recipient.

    • Information that the owner has already given the recipient consent to disclose.

    • Any other information that both parties agree in writing is not confidential.

  • How do I write a Non-Disclosure Agreement?

    You can customize the Rocket Lawyer NDA template in minutes. Here's what should be included in an NDA:

    Parties to the agreement

    • The owner of proprietary information and the recipient.

    • Either party can be an individual or a company.

    Confidential information details

    • The definition for what is considered confidential information.

    • The reason why the confidential information is being shared.

    Additional terms

    • Non-circumvention requirements (which protect an owner from being bypassed in a business transaction).

    • Timeframe of confidentiality.

    Definitions of confidential information spell out the categories or types of information covered by the agreement. This specific element serves to establish the rules-or subject/consideration-of the contract without actually releasing the precise information. For example, an NDA for an exclusive designer's clothing boutique might include a statement such as this: 'Confidential information includes customer lists and purchase history, credit and financial information, innovative processes, inventory and sales figures.

    Non-Disclosure Agreements also exclude some information from protection. Exclusions might comprise information already considered common knowledge or data collected before the agreement was signed.

    Additionally, NDAs explicitly spell out that the person receiving the information is to keep it secret and limit its use. This means you can't breach the agreement, encourage others to breach it, or allow others to access the confidential information through improper or unconventional methods. For example, if a designer from a computer company leaves a gadget prototype at a bar where it's discovered by a technology reporter, the designer would likely be in breach of the NDA he signed when he took the job.

    Time periods are also commonly addressed in NDAs and usually require that the party receiving the information stays mum for a number of years. This specific information is usually up for negotiation.

    As a Rocket Lawyer Premium member, you can access, edit, and copy your NDA template using any device. Your completed document can also be electronically signed or downloaded in PDF or Word format. If you make additional edits directly to the document, it is recommended that you have a lawyer review your changes.

  • Is an NDA legally binding?

    While a properly executed NDA form is usually enforceable, there are a few key considerations to keep in mind if you want to take a dispute to court:

    • Does your state have protections against unreasonable or overly broad scopes?
    • Was the information shared accidentally (e.g. overheard, hacked or otherwise stolen?)
    • Is the information well-known or easily findable?
    • Can the process or product easily be developed without access to your information?
    • Do you have proof that the recipient of the information was the true source of the leak?
    • Can you prove that the release of information actually caused monetary or other types of damage to your company?

    Even the most simple confidentiality agreement can benefit from attorney review. If you have questions about the enforceability of your Non-Disclosure Agreement, ask a lawyer.

    Legal resources for a Non-Disclosure Agreement: 48 CFR § 227.7103-7

  • How long should an NDA last?

    Generally, the time period is limited to as long as the confidential information is considered useful. Depending on the nature of the information that was exchanged, a shorter or reasonable amount of time, like one year, may be more legally enforceable. However, information like trade secrets may benefit from being kept confidential for an indefinite amount of time.

  • What happens if you break a Non-Disclosure Agreement?

    Breaking an NDA is the same as breaking any other contract, however there are certain legal exceptions. Generally speaking, you may legally break a Non-Disclosure Agreement if there is a misrepresentation of material fact (hiding or fabricating important details in the contract) or if illegal activity is involved. If you are considering breaking any legal contract, it is usually best to talk to a lawyer beforehand.

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