This unilateral nondisclosure agreement is between
The Disclosing Party has developed certain confidential information that it wants to make available to the Receiving Party for the purpose of
The Receiving Party wants to review, examine, inspect, or obtain the confidential information only for the above-described purposes, and to otherwise maintain the confidentiality of that information pursuant to this agreement.
The parties therefore agree as follows:
1. CONFIDENTIAL INFORMATION.
The Disclosing Party may (but is not required to) disclose certain of its confidential and proprietary information to the Receiving Party. "Confidential Information" means:
- (a) information relating to the Disclosing Party or its current or proposed business, including financial statements, budgets and projections, customer identifying information, potential and intended customers, employers, products, computer programs, specifications, manuals, software, analyses, strategies, marketing plans, business plans, and other confidential information, whether provided orally, in writing, or by any other media, that was or will be:
- (i) provided or shown to the Receiving Party or its directors, officers, employees, agents, and representatives (each a "Receiving Party Representative") by or on behalf of the Disclosing Party or any of its directors, officers, employees, agents, and representatives (each a "Disclosing Party Representative"); or
- (ii) obtained by the Receiving Party or a Receiving Party Representative from review of documents or property of, or communications with, the Disclosing Party or a Disclosing Party Representative; and
- (b) all notes, analyses, compilations, studies, summaries, and other material, whether provided orally, in writing, or by any other media, that contain or are based on all or part of the information described in subsection (a) (the "Derivative Materials").
The Disclosing Party shall identify Confidential Information disclosed orally as confidential within
2. OBLIGATION TO MAINTAIN CONFIDENTIALITY.
- (a) Confidentiality. The Receiving Party shall, and shall ensure that each Receiving Party Representative, keep the Confidential Information confidential. Except as otherwise required by law, the Receiving Party and Receiving Party Representatives may not:
- (i) disclose any Confidential Information to any person or entity other than:
- A. a Receiving Party Representative who needs to know the Confidential Information for the purposes
- of its business with the Disclosing Party;
- B. with the Disclosing Party's prior written authorization; or
- (ii) use the Confidential Information for any purposes other than those contemplated by this agreement.
- (i) disclose any Confidential Information to any person or entity other than:
- (b) No Reverse Engineering. The Receiving Party may not reverse engineer, disassemble, or decompile any prototypes, software, or other tangible objects that embody the Confidential Information and that are provided to the Receiving Party under this agreement.
- (c) Term. The Receiving Party shall, and shall require each Receiving Party Representative to, maintain the confidentiality and security of the Confidential Information until the earlier of: (i) such time as all Confidential Information disclosed under this agreement becomes publicly known and is made generally available through no action or inaction of the Receiving Party or (ii) the third anniversary of the disclosure. However, to the extent that the Disclosing Party has disclosed information to the Receiving Party that constitutes a trade secret under law, the Receiving Party shall protect that trade secret for as long as the information qualifies as a trade secret.
3. EXCLUSIONS.
The obligations and restrictions of this agreement do not apply to that part of the Confidential Information that:
- (a) was or becomes publicly available other than as a result of a disclosure by the Receiving Party in violation of this agreement;
- (b) was or becomes available to the Receiving Party on a nonconfidential basis before its disclosure to the Receiving Party by the Disclosing Party or a Disclosing Party Representative, but only if:
- (i) the source of such information is not bound by a confidentiality agreement with the Disclosing Party or is not otherwise prohibited from transmitting the information to the Receiving Party or a Receiving Party Representative by a contractual, legal, fiduciary, or other obligation; and
- (ii) the Receiving Party provides the Disclosing Party with written notice of such prior possession either (A) before the execution and delivery of this agreement or (B) if the Receiving Party later becomes aware (through disclosure to the Receiving Party) of any aspect of the Confidential Information as to which the Receiving Party had prior possession, promptly on the Receiving Party so becoming aware; or
- (c) is requested or legally compelled (by oral questions, interrogatories, requests for information or documents, subpoena, civil or criminal investigative demand, or similar process), or is required by a regulatory body, to be disclosed. However, the Receiving Party shall:
- (i) provide the Disclosing Party with prompt notice of any such request or requirement before disclosure so that the Disclosing Party may seek an appropriate protective order or other appropriate remedy; and
- (ii) provide reasonable assistance to the Disclosing Party in obtaining any such protective order.
- If a protective order or other remedy is not obtained or the Disclosing Party grants a waiver under this agreement, then the Receiving Party may furnish that portion (and only that portion) of the Confidential Information that, in the written opinion of counsel reasonably acceptable to the Disclosing Party, the Receiving Party is legally compelled or otherwise required to disclose. The Receiving Party shall make reasonable efforts to obtain reliable assurance that confidential treatment will be accorded any part of the Confidential Information so disclosed; or
- (d) was developed by the Receiving Party independently without breach of this agreement.
4. RETURN OF PROPERTY.
If the Disclosing Party requests, the Receiving Party shall, and shall cause each Receiving Party Representative to promptly (and no later than
- (a) return all Confidential Information to the Disclosing Party; and
- (b) destroy all Derivative Material and within
days of this destruction, provide a written certificate to the Disclosing Party confirming this destruction.
6. OWNERSHIP RIGHTS.
The Receiving Party acknowledges that the Confidential Information is, and at all times will be, the Disclosing Party's sole property, even if suggestions made by the Receiving Party are incorporated into the Confidential Information. The Receiving Party obtains no rights by license or otherwise in the Confidential Information under this agreement. Neither party solicits any change in the other party's organization, business practice, service, or products, and the disclosure of Confidential Information may not be construed as evidencing any intent by a party to purchase any products or services of the other party or as an encouragement to expend funds in development or research efforts. The Confidential Information may pertain to prospective or unannounced products. The Receiving Party may not use the Confidential Information as a basis on which to develop or have a third party develop a competing or similar plan or undertaking.
8. NO OBLIGATION.
Nothing in this agreement obligates either party to proceed with any transaction between them, and each party reserves the right, in its sole discretion, to terminate the discussions contemplated by this agreement concerning the business opportunity, if any, and to cease further disclosures, communications, or other activities under this agreement on written notice to the other party. Any commitment to proceed with a transaction will be set forth in a separate agreement signed by the parties.
9. NO WARRANTY.
ALL CONFIDENTIAL INFORMATION IS PROVIDED "AS IS." THE DISCLOSING PARTY MAKES NO WARRANTIES, EXPRESS, IMPLIED, OR OTHERWISE, REGARDING THE ACCURACY, COMPLETENESS, OR PERFORMANCE OF ANY SUCH INFORMATION.
10. GOVERNING LAW; EQUITABLE RELIEF.
- (a) Choice of Law. The laws of the state of
govern this agreement (without giving effect to its conflicts of law principles). - (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in
County, . - (c) Equitable Relief. The Receiving Party's breach of this agreement will cause irreparable harm to the Disclosing Party and monetary damages may not be a sufficient remedy for an unauthorized disclosure of the Confidential Information. If the Receiving Party discloses the Confidential Information in violation of this agreement, the Disclosing Party may, without waiving any other rights or remedies and without posting a bond or other security, seek an injunction, specific performance, or other equitable remedy to prevent competition or further disclosure, and may pursue other legal remedies.
11. AMENDMENTS.
No amendment to this extension will be effective unless it is in writing and signed by both parties or their authorized representatives.
12. ASSIGNMENT AND DELEGATION.
- (a) No Assignment. Neither party may assign any of its rights under this agreement, except with the prior written consent of the other party. All voluntary assignments of rights are limited by this subsection.
- (b) No Delegation. Neither party may delegate any performance under this agreement, except with the prior written consent of the other party.
- (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made in violation of this section, it is void.
13. COUNTERPARTS; ELECTRONIC SIGNATURES.
- (a) Counterparts. The parties may execute this agreement in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
- (b) Electronic Signatures. This agreement, agreements ancillary to this agreement, and related documents entered into in connection with this agreement are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.
14. SEVERABILITY.
If any provision in this agreement is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this agreement, but this agreement will be construed as if the invalid, illegal, or unenforceable provisions had never been contained in this agreement, unless the deletion of those provisions would result in such a material change that would cause completion of the transactions contemplated by this agreement to be unreasonable.
15. NOTICES.
- (a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
- (b) Addresses. A party shall address notices under this section to a party at the following addresses:
- If to the Disclosing Party:
, - If to the Receiving Party:
, - (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.
16. WAIVER.
No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this agreement will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.
17. ENTIRE AGREEMENT.
This agreement constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement with respect to the subject matter of this agreement. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this agreement are expressly merged into and superseded by this agreement. The provisions of this agreement may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this agreement by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this agreement. Except as set forth expressly in this agreement, there are no conditions precedent to this agreement's effectiveness.
18. HEADINGS.
The descriptive headings of the sections and subsections of this agreement are for convenience only, and do not affect this agreement's construction or interpretation.
19. EFFECTIVENESS.
This agreement will become effective when all parties have signed it. The date this agreement is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this agreement.
20. NECESSARY ACTS; FURTHER ASSURANCES.
Each party and its officers and directors shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this agreement contemplates or to evidence or carry out the intent and purposes of this agreement.
[SIGNATURE PAGE FOLLOWS]
Each party is signing this agreement on the date stated opposite that party's signature.
| Date: _____________________________ | By: _________________________________________________________ |
| Name: | |
| Date: _____________________________ | By: _________________________________________________________ |
| Name: |
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Unilateral non-disclosure agreement: How-to guide
In today's cut-throat business world, keeping secrets safe is crucial to staying ahead and protecting what's valuable. Whether it's your special technology, big plans, or customer information, it's vital to stop others from using it without permission.
That's where the Unilateral Non-Disclosure Agreement (NDA) comes in. This legal document is like a shield, protecting your private information when you share it with others. Unlike mutual NDAs, where both sides have to keep quiet, a unilateral NDA mostly helps the one sharing the secrets by making the other side promise to keep things quiet.
In this guide, we'll dive deep into unilateral NDAs, explaining what they're for, what they include, and how to make one. Whether you're starting a business, running a company, or working with clients, understanding and using unilateral NDAs can help keep your secrets safe and protect what's yours.
What is a unilateral non-disclosure agreement (NDA)?
A unilateral non-disclosure agreement is a legally binding contract between two parties, where one party (the disclosing party) disclose secret information to the other party (the receiving party), imposing necessities on the other party to maintain the confidentiality of the disclosed information. In essence, it serves as a safeguard to protect sensitive company information from unauthorized leaks or use.
How is a unilateral NDA different from a mutual NDA?
Unilateral NDA: Also known as a one-way NDA, this type of agreement is commonly used when only one party is disclosing confidential information to the other party. The receiving party agrees to keep the information that is disclosed confidential and refrain from disclosing it to third parties or using it for unauthorized purposes.
Mutual NDA: Also known as a two-way or bilateral NDA, this type of agreement is used when both parties are disclosing confidential information to each other. In a mutual NDA, both parties disclose confidential information, agree to keep it a secret, and refrain from disclosing it to third parties or using it for unauthorized purposes.
These two types of NDAs serve different purposes and are utilized based on the specific circumstances of the business relationship and the nature of the confidential information being shared.
When do you need a unilateral non-disclosure agreement?
A one-way non-disclosure agreement is a must-have in situations where keeping secrets safe is a top priority. Here are some key times when using one is super important:
Sharing proprietary business information with third parties
Whether you're disclosing the secrets of a trade, proprietary technology, joint venture, or strategic company plan, sharing secret information with third parties, such as vendors, suppliers, or strategic partners, requires the implementation of this NDA. This agreement ensures that your private data remains protected and prevents unauthorized leaks or use by the receiving party.
Collaborating with freelancers, contractors, or consultants
Engaging freelancers, contractors, or consultants to work on projects often involves sharing private data about your company’s operations, processes, or intellectual property. Implementing a unilateral NDA in such collaborations is essential to safeguard your proprietary information.
Legal framework guiding unilateral non-disclosure agreements
When creating and enforcing Unilateral Non-disclosure Agreements (NDAs) in the United States, it's crucial to be mindful of the legal guidelines set forth by relevant laws and fundamental principles. Here's a rundown of the important laws and principles that shape NDAs:
1. Uniform Trade Secrets Act (UTSA)
The Uniform Trade Secrets Act (UTSA) acts as a shield for trade secrets, which are often the lifeblood of the sensitive information covered in NDAs. Adopted by many states, this law sets rules for identifying, safeguarding, and enforcing trade secrets. NDA documents often include UTSA provisions to ensure that these valuable secrets are shielded from third parties.
2. Defend Trade Secrets Act (DTSA)
The Defend Trade Secrets Act (DTSA), introduced in 2016, offers federal protection for trade secrets, complementing state laws like the UTSA. Here, the trade secret owners can seek remedies such as injunctions, damages, and legal fees. The DTSA even has a provision for emergency orders to stop stolen trade secrets from spreading. NDA documents often refer to the DTSA to make sure they're in line with federal trade secret laws.
3. Common law principles of contract and confidentiality
In addition to statutory laws like the UTSA and DTSA, unilateral NDAs are also shaped by everyday legal principles of trust and privacy. These principles lay the groundwork for how contracts, including NDAs, are understood and upheld. They also recognize the importance of keeping sensitive information confidential, especially in relationships like between bosses and employees, even without a formal agreement. NDA documents often nod to these principles to make sure everyone's rights and responsibilities are crystal clear.
Elements of a unilateral non-disclosure agreement
Let's take a closer look at what makes up these confidentiality agreements:
1. Identifying the parties
In an NDA, it's important to know who's in the picture. The disclosing party is the one sharing the private information, while the receiving party is the one promising to keep it under wraps. This part should include the full names and contact information of both parties to make sure everyone knows who's who.
2. Defining the confidential information
The NDA needs to clearly state what kind of information is considered confidential and should be kept secret. By being clear about what's private, the NDA makes sure everyone knows what's covered by the agreement.
3. Understanding the “obligations of the receiving party”
The NDA should outline the responsibilities and necessities of the party who is receiving the information regarding the handling and protection of confidential data.
The NDA should lay out what the receiving party needs to do to keep the information safe. This might mean promising to keep things confidential, not sharing or using the info for anything unauthorized, and taking reasonable steps to make sure it stays protected. Plus, the receiving party might have to limit who can see the information and give it back or let go of it if the disclosing party asks or if the agreement is terminated.
4. Understanding what is “no reverse engineering”
Reverse engineering is like taking apart a puzzle to see how it works. The "no reverse engineering" rule in a Unilateral Agreement (NDA) is like saying, "hands off" to the receiving party.
This rule makes sure the receiving party can't try to copy or figure out the secret information by taking it apart or analyzing it. It's all about keeping things safe and secure.
5. Duration of the agreement
Think of the NDA like a clock—it needs to say how long it's ticking. Mention the period, like a year, or until the secret information isn't secret anymore. And if things go south, there should be a way to end it early, like if both sides agree or if someone breaks the rules.
6. Governing law and jurisdiction
In the non-disclosure agreement, specify the applicable rules and the venue for dispute resolution. This involves stating the governing laws and the courts responsible for resolving disputes that may arise.
7. Exclusions
"Exclusions" in a Unilateral NDA are specific types of information that don't count as secrets and don't have to follow the confidentiality rules in the agreement. Here are a few examples:
- Information already in the public domain: If information is already out there for everyone to see, it doesn't count as secret. No blame comes to the receiving party if it's already public.
- Information independently developed by the receiving party: If the receiving party figured out the information on their own without using the disclosing party's secrets, it's not covered by the NDA.
- Information received from third parties: If someone else gave the receiving party the information legally and without any strings attached, it's not part of the NDA.
- Information disclosed with consent: If the disclosing party said it's okay to share the information, then it's not a secret anymore. Both parties have to agree to share it for it to count.
Tips for drafting a comprehensive document
When it comes to drafting a Unilateral Agreement (NDA), you've got to think it through to make sure it's strong enough to keep your confidential information safe and keep trouble at bay. Here are some important tips to help you create a solid NDA:
1. Customize the agreement to the specific needs and circumstances of the parties involved
Each business relationship and secret shared is unique. Make sure the NDA fits like a glove, addressing the specific needs, worries, and hopes of both sides. Consider things like what's being shared, how you know each other, and why you're sharing it. Tailoring the agreement means it's more likely to work for everyone and keep their interests safe.
2. Seek legal advice
Bring in legal help who has expertise when it comes to contracts and protecting ideas. They'll help make sure the NDA follows the rules and covers all the bases. Consulting a legal counsel can save you headaches later on and make sure that everyone's protected as best as possible.
3. Clearly define terms
Confusion in the NDA language can lead to disagreements. Use plain, easy-to-understand terms like "confidential information," "disclosure," "use," "duration," and "termination." Give examples to show what you mean and avoid vague wordings. Clear language makes sure everyone knows what they're agreeing to and keeps things running smoothly.
4. Consider the scope of confidentiality
Think carefully about what information the NDA protects and what it doesn't. Spell out exactly what's considered private—like trade secrets or customer lists—and what's not, such as information already out there or shared with permission. By setting clear boundaries, you can make sure the NDA does its job of keeping secrets safe while still letting business happen.
Getting started with safeguarding your secrets is easy with the free Unilateral NDA template from LegalZoom—it's like having a trustworthy guide to help you protect your valuable assets and navigate the complexities of business relationships with confidence.
Conclusion
As businesses work with others and share secrets, using Unilateral NDAs is a must. They’re a way to build trust and keep relationships strong. So, whether big or small, businesses should make unilateral NDAs a part of their routine. It's not just about legal paperwork—it's about keeping secrets safe, staying ahead in the market, and building trustworthy relationships in today's fast-paced business world.
Frequently asked questions
What's a unilateral non-disclosure (NDA) agreement?
A unilateral nondisclosure agreement, or unilateral NDA, safeguards confidential company information such as customer data, inventions, and secrets of trade. It clarifies what information is confidential and helps prevent accidental leaks of proprietary details, technology, and intellectual property.
By establishing clear guidelines for confidentiality, an NDA informs colleagues about what should be kept confidential, reducing the risk of the secrets of a trade falling into competitors' hands.
To complete a unilateral nondisclosure agreement effectively, you'll need the following information ready:
- Sender's information: Your name or your company's name and contact details
- Recipient's information: Name and contact details of the party being asked to sign the NDA
- Project details: Explanation of the project or arrangement involved with the second party
- Effective timing: Determination of the agreement's start date and any associated deadlines
What are the five key elements of a non-disclosure agreement?
The five key elements of a non-disclosure agreement (NDA) typically include:
- Identification of the parties
- Definition of confidential information
- Obligations of the receiving party
- Duration of the agreement
- Governing law and jurisdiction
What are the types of NDA?
Predominantly, NDAs are of three types:
Unilateral NDA: Also called a one-way NDA, when a deal happens and one side shares secrets with the other. The receiver pledges to keep the disclosed information private and not share it with outsiders or misuse it.
Mutual NDA: Also known as a two-way or bilateral NDA, this pact comes into play when both parties share information. Both sides agree to keep each other's secrets confidential and not share them with third parties or misuse them.
Multilateral NDA: In this agreement, multiple parties share confidential information among themselves while agreeing to keep it confidential. It's like a circle of trust where everyone keeps each other's secrets safe.
These NDAs serve different purposes and are used based on the specifics of the business relationship and the confidential information shared.
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