How to Draft a Non Disclosure Agreement (Free NDA Template)

You've put in a lot of effort to create your company's confidential information, proprietary data, and trade secrets that contribute to its success. It's crucial to protect this sensitive information, especially when sharing it with others.

A non-disclosure agreement (NDA) can help keep your business's confidential and proprietary information safe from being disclosed. Here's a simple guide on how to draft an NDA, including a free template, and why it's important to have this agreement in place.

An NDA is a legal document that prohibits the recipient from sharing or using the confidential information shared with them as a part of an agreement with your company.

Such an agreement can be crucial when sharing crucial information with employees, collaborators, representatives, or suppliers.

In this article, we'll guide you through creating a standardized NDA that can act as an agreement form or legal agreement for various purposes.

To understand an NDA (Non-Disclosure Agreement), you need to know its coverage. An NDA outlines the terms and conditions where both parties agree not to reveal non-public information to others.

It specifies the type of sensitive information covered, the agreement's duration, and any usage restrictions.

When creating an NDA, it's important to distinguish it from a confidentiality agreement. A confidentiality agreement is broader and can be part of an NDA to safeguard sensitive information.

Both are legally binding, but while a confidentiality agreement details what can and cannot be shared, an NDA strictly prohibits sharing or using the covered information.

1. Identify the Parties Involved

List all parties in the agreement to ensure it’s between the correct entities.

2. Define Confidential Information

Clearly specify what information is considered confidential.

3. Specify Exclusions

Identify situations where the recipient can share information, like with lawyers, auditors, or courts.

4. Outline Recipient's Obligations

Detail the recipient's responsibilities, including proper use, protection from unauthorized disclosure, and sharing only on a need-to-know basis.

5. Establish Duration

Set the length of time the NDA will be in effect and when the information will no longer be confidential.

6. Termination Clause

Include how the agreement can be ended by the involved parties.

7. Legal Protection Clause

State that the recipient agrees to be bound by the governing law and resolve disputes in court.

8. Signature Provision

Provide space for signatures from all parties involved.

There are five types of business secrets, discussed below:

Intellectual Property

This typically covers trademarks, logos, trade secrets, designs, patents, and copyrights. Intellectual property is essential for companies to protect and maintain business secrets.

Proprietary Information

Proprietary information refers to any confidential company information that gives your company an advantage over other players. Such information could include financial data, customer lists, and data customer preferences.

Trade Secrets

Trade secrets involve any business secret that includes manufacturing processes, prototypes, and algorithms. Such sensitive information can give a company an edge over competitors, and a strong NDA is vital to protect this information.

Sensitive Information

Sensitive information encompasses confidential employee information that includes payment receipts, salaries, allowances, etc.

Private Data

Private data comprises customer or client data that your company holds, which may include addresses, phone numbers, emails, or credit card details.

Creating an NDA is crucial to protecting sensitive information shared with third parties. The template in this article can be customized to fit your specific needs, giving you peace of mind when sharing protected information with third parties.

Download our template now by clicking the "Free Download" button on the right-hand side of our website!

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