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Whenever sensitive information needs to be shared between two parties it is a good idea to use a confidentiality or non-disclosure agreement. This agreement will help formalise the relationship and provide legal remedies if the confidential information is released.
NON-DISCLOSURE AGREEMENT
THIS NON-DISCLOSURE AGREEMENT (the "Agreement") dated this ________ day of ________________, ________
BETWEEN:
____________________ of ________________________________________________________________________________(the "Employer")
OF THE FIRST PART
- AND -
____________________ of ________________________________________________________________________________(the "Employee")
OF THE SECOND PART
BACKGROUND:
IN CONSIDERATION OF and as a condition of the Employer employing the Employee and the Employer providing the Confidential Information to the Employee in addition to other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, the parties to this Agreement agree as follows:
IN WITNESS WHEREOF ____________________ and ____________________ have duly affixed their signatures under hand and seal on this ____ ________________ ________.
_______________________________WITNESS: ______________________Address: ________________________
_____________________________________________________(Employer)
_____________________________________________________(Employee)
A Non-Disclosure Agreement (NDA) is sometimes called a:
A Non-Disclosure Agreement, commonly referred to as an NDA, is a contract in which sensitive and confidential information is exchanged between two parties.
By signing an NDA, it's expected that the individuals involved will keep the information they discuss private from third-parties in order to protect the person who is disclosing confidential information (i.e. the disclosing party) from being at a competitive disadvantage. Legal action may be taken if the contract is broken.
LawDepot's Non-Disclosure Agreement template can be customised to abide by the laws in England, Northern Ireland, Scotland and Wales (based on the country you select).
There are two parties involved in an NDA:
Depending on the type of agreement, a single party can be made up of multiple individuals or organisations. For example, there may be two inventors who act as the disclosing party in an agreement. LawDepot's NDA template allows you to add as many individuals to a party as is necessary.
A Non-Disclosure Agreement is commonly used in situations involving disclosure of commercially sensitive information, for instance:
LawDepot's Non-Disclosure Agreement is built for a unilateral relationship where one party discloses information to another party. A unilateral relationship means only one party is under obligation to keep the information confidential. For a mutual NDA (where both parties agree to share and keep confidential information), it's recommended that each party create a unique document for the other to sign.
Confidential information is information that is not common knowledge or known to the public at large. An NDA can protect a variety of information, such as:
Once the subject matter of the confidential information is established, the disclosing party must describe how the receiving party is permitted to use it. For example, the disclosing party might say the information must be kept confidential but can be used to inform business decisions or operations.
An NDA can continue indefinitely or end on a predetermined date. If a date is not specified, the information should remain confidential indefinitely.
Alternatively, you can specify a date for the duty of non-disclosure (the responsibility of keeping the information confidential) to end. This date can be when the relationship between the two parties ends, or it can be when the information no longer needs to be confidential because it will be in the public domain. Although, it should be noted that the duties of non-disclosure can extend beyond the formal end of the agreement. For example, trade secrets are considered valuable business assets and are generally protected indefinitely by UK law.
Also, an NDA will not be enforceable if the confidential information becomes publicly known (through no fault of the receiving party) because it can no longer be defined as confidential information.
For instance, imagine two inventors enter an NDA with a potential investor. The investor agrees to keep the details of the invention confidential until they can begin manufacturing and selling the new product. If one of the inventors gives away the secrets of the invention during an interview with a journalist, the information would be considered public knowledge, and the investor could not be held accountable by the inventors if that information is used by third parties.
Sometimes commercially sensitive information is used to unfairly lure away customers or employees. The following clauses are designed to prevent this:
These clauses are often found within a Non-Disclosure Agreement because they provide additional protection to the disclosing party's business interests. However, the enforcement and extent of these clauses may vary between jurisdictions.
A Non-Disclosure Agreement acts as a strong deterrent for anyone who has signed one because of the legal action that can be taken if the confidential information is leaked. Remedies for a breach of contract can be included in the NDA, like requiring the receiving party to pay liquidated damages (a predetermined sum of money).
Depending on the situation, the disclosing party could file lawsuits such as:
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