Independent Contractor Unilateral Non-disclosure Agreement - Free Template

Protect your proprietary information when working with contractors. An independent contractor unilateral NDA establishes clear boundaries and terms.
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How-to guides, articles, and any other content appearing on this page are for informational purposes only, do not constitute legal advice, and are no substitute for the advice of an attorney.

Independent contractor non-disclosure agreement: How-to guide

Companies often face the challenge of finding the right personnel equipped with the specialized skills necessary to accomplish specific tasks. The traditional route of hiring regular employees for every role can be time-consuming and costly, involving extensive recruitment processes, onboarding procedures, and long-term commitments.

For example, when you hire an employee, the company has to bear the cost of taxes, provide paid time off, provide health insurance, and cover other benefits. Sometimes, the employee hired might also be incompetent, and terminating them from the company is another tedious process.

Given these challenges, many businesses turn to independent contractors to fulfill their needs.

Companies hire independent contractors because they offer a flexible solution to meet fluctuating demands without the long-term obligations attached to traditional employment.

However, a critical concern lies amidst the benefits of engaging independent contractors: safeguarding confidential information. As part of the work, companies often have to disclose confidential information to their hired independent contractors. Like how employees need to sign an employment non-disclosure agreement (or employee NDA) when they’re hired, independent contractors should also be made to sign an independent contractor non-disclosure agreement along with their independent contractor agreement.

What’s an independent contractor non-disclosure agreement?

An independent contractor non-disclosure agreement is a legal document that outlines the terms and conditions regarding the protection of confidential information shared between a company and an independent contractor. Essentially, it is a contractual safeguard against the unauthorized disclosure or use of sensitive data.

For example, imagine a software development company hiring an independent contractor to develop a new application. The company requires the contractor to sign an independent contractor NDA to protect its proprietary algorithms and client data. This agreement prohibits the contractor from disclosing confidential information he gains access to during the project and outlines the legal consequences of breaching the agreement.

Why do independent contractors need to sign an NDA?

Having an independent contractor NDA offers several benefits:

1. Safeguards intellectual property and trade secrets

One of the primary benefits of an independent contractor NDA is the protection of intellectual property (IP) and trade secrets. Companies often entrust independent contractors with access to valuable information, such as proprietary technology, client lists, or business strategies. By requiring contractors to sign NDAs, businesses can mitigate the risk of unwanted disclosure and potential exploitation of their trade secrets.

2. Clear understanding of responsibilities 

By clearly defining the scope of confidentiality and the contractor's obligations, an NDA sets expectations from the outset, reducing the likelihood of misunderstandings or disputes down the line.

3. Protection of confidential information

By outlining what constitutes confidential information and the contractor's obligations regarding its protection, an NDA helps prevent possible breaches and misuse of data.

4. Legal recourse in case of breach 

In the unfortunate event of a breach of confidentiality, an independent contractor nondisclosure agreement provides a legal framework for recourse. These agreements typically outline the consequences of unwarranted disclosure, including potential monetary damages and termination of the contractor's engagement. A clear contractual framework enhances the company's ability to enforce its rights and seek remedies for breaches.

5. Compliance with regulatory requirements

Many industries are subject to regulations governing the protection of sensitive information, such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA) in healthcare prevents the disclosure of sensitive patient health information without the informed consent of the patient. A non-disclosure agreement helps ensure compliance with these requirements by mandating strict confidentiality measures.

6. Facilitates trust and collaboration

Signing an independent contractor non-disclosure agreement can foster trust and collaboration between companies and independent contractors. It reassures contractors that their contributions will be treated with respect and confidentiality, enhancing their willingness to engage with the company. Additionally, clear communication about confidentiality expectations can strengthen the working relationship and promote a culture of mutual trust.

What essential clauses should be included in an independent contractor NDA?

Introduction to the parties

Start the section by introducing the parties involved in the agreement. The party who hires an independent contractor is addressed as the “company,” and the professional expert hired is called the “contractor” in the agreement.

Confidential information

This part defines what constitutes confidential or proprietary information with respect to the contract. A company’s confidential information can be:

  • Financial information, including budgets and projections, actual sales and profits, etc.
  • Proprietary information belonging to the company, like computer programs, product manuals, drawings, analyses, notes, studies, summaries, etc.
  • Other proprietary information includes business secrets, marketing plans and strategies, trade secrets, intellectual property, and other sensitive information pertinent to the company's operations.
  • Companies also have access to certain privileged information about their employees (including personal details), customer lists, and other sensitive client data.

Obligation to maintain confidentiality

This clause outlines the independent contractor's obligation to maintain the confidentiality of the company's proprietary information both during and after the term of the agreement. It emphasizes the contractor's duty to protect the confidentiality of such information from unauthorized disclosure. This even applies to the subcontractors hired by the independent contractor.


This section specifies the duration of the NDA, including its commencement and termination dates. It clarifies the time period during which the contractor is bound by the terms of confidentiality.


Here, certain types of information are excluded from the confidentiality obligations outlined in the agreement. This typically includes information already in the public domain or known to the contractor before entering into the agreement.


This section addresses various aspects of inventions created or disclosed during the contractor's work with the company. It covers areas such as inventions retained and licensed by the contractor before engaging with the company, disclosure of company inventions, assignment of company inventions, maintenance of records, and patent and copyright registrations.

Return of property

It specifies the contractor's obligation to return any property or materials belonging to the company, including all copies or duplicates, upon termination of the agreement.

Third-party information

This clause addresses how the contractor should handle third-party confidential information that may be disclosed to them during the course of their work.

Former employer or third-party confidential information

This part prohibits the contractor from using or disclosing any confidential information belonging to their former employers or other third parties.


This section outlines the procedure for providing notice in the event of any breach or potential breach of the non-disclosure agreement and any other communications required under the agreement.

Ownership rights

Here, the agreement clarifies that the company retains ownership rights to all confidential information and intellectual property disclosed to the contractor during their engagement.

Nature of relationship

This section clarifies that the company's and contractor's relationship is not an employer-employee one; they function as independent entities.

Choice of law

This clause establishes the governing law under which the agreement will be interpreted and enforced.


It outlines the procedure for making amendments or modifications to the agreement and specifies that any changes must be made in writing and signed by both parties.

Assignment and delegation

This section addresses whether either party can assign or delegate their rights and obligations under the agreement to another party.


It states that if any provision of the agreement is found invalid or unenforceable, the remaining provisions shall remain in full force and effect.


This clause specifies the method by which formal notices or communications should be delivered between the parties.


It clarifies that the failure to enforce any provision of the agreement shall not constitute a waiver of that provision or any other provision. For example, if the contractor has promised to deliver their services on the 15th of every month but one time they delayed it by six days and for that, they’re liable to a set fine. In such a scenario, if the company waives off the fine doesn’t mean that the company has waived off fines for future delays.

Entire agreement

This section states that the parties involved are signing the document according to the terms and conditions mentioned in the agreement. Any verbal or other communications made prior to or during the agreement will not be considered valid and enforceable.


It clarifies that the headings used throughout the agreement are for convenience and reference purposes only and do not affect the interpretation of the provisions.


This clause specifies the agreement's effective date and states that it remains in effect until terminated in accordance with its terms.

Counterparts; electronic signatures

This section allows and acknowledges using electronic signatures to sign the independent contractor non-disclosure agreement.

By incorporating these essential clauses into an independent contractor non-disclosure agreement, both parties can effectively protect sensitive information and intellectual property while fostering a productive working relationship.

Key takeaway

In the evolving landscape of business relationships, independent contractors play a crucial role in driving innovation and flexibility. However, with access to sensitive company information, the risk of unwarranted disclosure increases. Independent contractor NDAs serve as a vital tool for mitigating this risk, protecting valuable intellectual property, and preserving the trust between parties. Companies can safeguard their interests and foster successful collaborations with independent professionals by understanding the importance of these agreements and incorporating them into their contracting processes.

Frequently asked questions

What is the purpose of an independent contractor non-disclosure agreement?

From customer lists to proprietary software to blueprints and more, all companies have information they don’t want shared. An independent contractor non-disclosure agreement helps everyone understand what should stay private and what can be disclosed.

Can you write your own non-disclosure agreement?

Yes, you can create your own non-disclosure agreement from scratch if you know the important clauses that must be included in the document. But you can avoid such tedious hassles and use online templates to make the job easier. One such service provider is LegalZoom, which provides comprehensive NDA templates that suit your requirements. You can also seek the help of an attorney to draft your non-disclosure agreements based on your business needs.

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