In a Confidentiality Agreement, also known as a Non-Disclosure Agreement (NDA), two parties agree in writing to keep certain information confidential between them. While it is advisable for small business owners to secure the services of an employment or intellectual property attorney, non-lawyers with business experience can draft said contracts independently if they keep in mind the principles outlined in this article.

Confidentiality agreements must first identify the parties involved. In a confidentiality agreement, there is usually a “Disclosing Party” who is anticipating that it will be disclosing confidential information as part of the arrangement, and wants to keep this information confidential. Likewise, there is a reciprocal “Receiving Party” who will be receiving the information, and will be under an obligation to maintain the information in confidence. The Disclosing Party wants to use the Agreement to give legal force to the Receiving Party’s promise not to disclose the information. In order to do so, the Agreement must be carefully drafted to explain the obligations of the Receiving Party.

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Generally, the Receiving Party should be required to “hold and maintain the Confidential Information in strictest confidence for the sole and exclusive benefit of the Disclosing Party.” To make sure confidential information remains in confidence, the Receiving Party shall also agree to “carefully restrict access to Confidential Information to other employees, contractors and third parties as is reasonably required.” If, for instance, confidential information must be revealed to third parties, such as outside contractors, towards the end of successfully completing the project, the Agreement should recite that “the Receiving Party shall require those persons to sign nondisclosure restrictions at least as protective as those in the underlying Non-disclosure Agreement.”

In addition to restricting disclosure of confidential information, many companies also choose to restrict the use to which the confidential information may be put to. For instance, an employer may wish to restrict their employee from not only disclosing confidential information to outside parties but, also, from using confidential information for any matter but employer business.

The relief most often sought by employers in instances of breaches of employee confidentiality agreements is an injunction barring the employee from disclosing the information. Going after injunctive relief involves obtaining a court order, and to achieve it, it is necessary to show that the moving party-employer will suffer “irreperable harm” if the promise of non-disclosure continues to be broken. This can be a tough obstacle to overcome, as the employer must prove that no amount of monetary damages would make it whole. To eliminate this hurdle, the employer should draft a provision into the agreement that says that “any breach of the promise of confidentiality shall result in irreparable harm.”

For the small business owner, a letter of confidentiality, confidentiality agreements and non-disclosure agreements, are important methods for protecting trade secrets, customer lists, and other proprietary assets of the company.

To see actual confidentiality agreements visit the RealDealDocs.com Confidentiality Agreement Sample Library.

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A non-disclosure agreement also known as a non-disclosure contract or NDA is an agreement intended to protect information considered to be proprietary or confidential. Parties involved in executing an NDA promise not to divulge secret or protected information disclosed during employment or other business transactions.

A non-disclosure contract can be used to prohibit others from disclosing a new design, idea, or other confidential or copyrighted material. Should one of the parties to a non-disclosure contract or agreement use protected information without authorization, a court can stop the violator from making any further disclosures and may award monetary damages. Agreements typically include definition of confidential information, exclusions from confidential information, obligations of receiving party, time periods and miscellaneous provisions

These sample non-disclosure agreements are actual legal documents drafted by top law firms for their clients. You can use sample non-disclosure contracts or download non-disclosure agreements from RealDealDocs to draft competitive intelligence, drafting documents or to get information about transactions within a particular industry or sector. We have many sample non-disclosure agreements, and millions of legal documents and clauses that you can search for free.

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Non-Disclosure Agreements (NDAs) are agreements between two or more parties that operate to enforce secrecy and confidentiality by at least one party to the agreement. It is very important to clearly draft an NDA to define what the confidential information is, what the obligations of the receiving party are, when the agreement is in effect, and what the remedies are for the injured party in the event of a breach.

After listing the parties to the agreement, the date of the agreement, and the overall purpose of the agreement to prevent the unauthorized disclosure of confidential information (as defined in the agreement), the first provision of the NDA should define “confidential information.” For instance, confidential information could be all information or material that has or could have commercial value, or other utility in the business in which the disclosing party is engaged. This paragraph may also define how confidential information is to be labeled (such as by marking such information with a “confidential” stamp.)

Next the agreement should list all exclusions from the term “confidential information”; in other words, the agreement should define information or materials that are not confidential, even though they could be though of otherwise. Usually this limitation will extend to information that is either (a) publicly known, (b) discovered or created by receiving party before disclosure by disclosing party, i.e. things the receiving party discovered on his or her own, (c) information the receiving party learned through other legitimate means, or (d) information disclosed with disclosing party’s prior written approval.

The agreement should then address the obligations of the party who is receiving the confidential information. Broadly speaking, the receiving party must agree to hold and maintain the confidential information in the strictest confidence for the sole and exclusive benefit of the disclosing party. She must also agree that without prior written approval, she will not use the disclosing party’s confidential information for her own benefit, nor shall she publish, copy or otherwise disclose to others, or permit the use by others for their benefit, any confidential information. Notice the clause “or permit the use by others.” This is a key clause that any disclosing party will want to make sure to include. Otherwise, the disclosing party could have a tough time proving a breach if a third party discloses the confidential information with the help of the receiving party. The disclosing party may also want to include in the agreement a provision that the receiving party shall return any and all records, notes, and other written, printed, or tangible materials in its possession pertaining to confidential information immediately if requested in writing by disclosing party.

Next the agreement should define the time periods of the relationship. This provision, however, could make the agreement not to disclose confidential information indefinite. The agreement can be written to say that the non-disclosure provisions of the Agreement shall survive the termination of this Agreement and the receiving party must hold the confidential information in strict confidence until the information no longer qualifies as a trade secret or until disclosing party sends receiving part written notice releasing receiving party from the Agreement.

Finally, it is important for the disclosing party to carefully define the term “confidential information”, list any exclusions to when the promise does not apply, describe in detail the obligations of the parties, and include a provision addressing the time period that the non-disclosure agreement remains in effect. Finally, the drafter of the non-disclosure agreement may also want to include boilerplate contractual language regarding severability, integration, assignment, and choice of law.

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