creating a non-disclosure agreement


3

I'd like to consult an expert here and there with a project I am developing. I've found plenty of templates for NDA agreements online and I've already modified one to suit my needs. Is there anything else I need to do to make this form legally binding? It's straightforward enough that I don't think I need to have a lawyer review it, but was wondering if there are any other technicalities to meet before using it.

Thanks.

Edit:
The NDA is meant to be for my company with another company or individual. It's for a CA corp, though it's possible I might use it out-of-state.

Edit2: Here is the NDA with some redactions:

This Agreement is made by and between ---------------, a California corporation having its principal place of business at --------------------- and _ _, a _ ___ ___ whose principal mailing address is _ ___ ___ ___ (“Recipient”).

  1. Definition of Confidentiality. As used in this Agreement, "Confidential Information" refers to any information which has commercial value and is technical information, including patent, copyright, trade secret, and other proprietary information, techniques, sketches, drawings, models, inventions, know-how, processes, apparatus, equipment, algorithms, software programs, and software source related to the current, future and proposed products and services of ------------------.
  2. Nondisclosure and Nonuse Obligations. In exchange for any Confidential Information disclosed by ------------ to Recipient, the Recipient will maintain in confidence and will not disclose, disseminate or use said Confidential Information, whether given in written or non-written form. If Recipient is not an individual, Recipient agrees that Recipient shall disclose Confidential Information only to those of its employees who need to know such information, and certifies that such employees have previously signed a copy of this Agreement.
  3. Survival. This Agreement shall govern all communications between both parties. Upon termination of any relationship between the parties, Recipient will promptly deliver to ---------, without retaining any copies, all documents and other materials furnished to Recipient by ---------------.
  4. Governing Law. This Agreement shall be governed in all respects by the laws of the United States of America and by the laws of the State of California, as such laws are applied to agreements entered into and to be performed entirely within California between California residents.
  5. Injunctive Relief. A breach of any of the promises or agreements contained herein will result in irreparable and continuing damage to ---------- for which there will be no adequate remedy at law, and ------------ shall be entitled to injunctive relief and/or a decree for specific performance, and such other relief as may be proper (including monetary damages if appropriate).
  6. Entire Agreement. This Agreement constitutes the entire agreement with respect to the Confidential Information to be disclosed, and supersedes all prior or contemporaneous oral or written agreements concerning such Confidential Information. This Agreement may only be changed by mutual agreement of authorized representatives of the parties in writing.

    IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written below.

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asked Mar 3 '11 at 11:56
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Cyclone
128 points
  • Unfortunately your questions is too broad. Since we don't have your NDA how can we know what things you might be missing? (also, you should talk to a lawyer) – Michael Pryor 9 years ago

4 Answers


3

Unless you have a lot of confidence in the NDA form you're using, you should still have a lawyer review it. There may be specific laws or precedences in your jurisdiction that would make the NDA not do what you think it's going to do. (Personally, I have a lot of confidence in the Nolo forms, and would use those unchanged without a lawyer's review, but anything else, or anything I modified, I would show to a lawyer first).

A contract requires certain things, like consideration, a technical term that means that each party has to give the other party something of value. If a contract is entirely one sided, the contract is not binding. If I sign a contract with you that I will pay you $1,000,000, I'm off the hook, because there is no consideration. More likely, if you write a one-sided contract which simply says that party A will not disclose information, that contract lacks consideration and is not enforceable.

These are the kinds of details that few non-lawyers think about and which often trip up novices writing their own contracts.

Then you just need to get two copies made, have both parties sign both copies, give one copy to each party and you have a legally binding contract.

answered Mar 3 '11 at 13:28
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Joel Spolsky
13,472 points
  • @Anon, thanks for the comment. Im guessing Joel meant that local laws might supersede stipulations in an NDA, but I'm guessing most people don't modify NDAs to work around local laws (if it's even possible). The consideration bit is good. I'm verifying that my modified NDA explicitly states I will be disclosing confidential information. – Cyclone 9 years ago

1

I can't give you legal advice (am still a law student), but can give some helpful info:

  • The laws governing these are different in every state. So you might focus your research accordingly.
  • NDAs are one part of a company's IP protection along with Non-compete and Non-solicitation agreements.
  • An NDA can be different depending on whether it's intended to be between an employee and a company, or alternatively, between two companies.
answered Mar 3 '11 at 18:44
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Dogweather
212 points
  • aren't non-compete and non-solicitation related to employees and the skills/knowledge they possess? I don't think my company is to the point I would need those since I don't have employees yet. The NDA I modified is meant to be for an individual and the company, or two companies. – Cyclone 9 years ago
  • Yep! non-competes and non-solicitations are usually relevant for companies that have employees. I could imagine scenarios, though, where a company may want a contractor to sign one of these. – Dogweather 8 years ago

0

An NDA is a document that you would want to be legally binding between the parties. If it isn't, it is worthless. A good lawyer would go through your proposed NDA and made certain that it is 100% legally binding, not something that could be legally binding. I could imagine that the proposed NDA should be reviewed periodically as well.

A good analogy would be getting a plumber to develop an e-commerce website. It could work, but the confidence level of it working 100% is just not there.

answered Mar 4 '11 at 08:21
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Tehnyit
144 points

0

While my response is not legal advice, I do use many NDAs - both my own and ones provided by the other party. Protecting confidentiality is an ongoing process that begins with one or more agreements (e.g., the NDA) and trust. Once the NDA is signed, your actions will have more to do with protecting confidentiality that the NDA. Consider the following:

  • Declaration of Confidentiality. Communications between parties consist of both confidential and non-confidential content. It is a good practice to remind parties, during ongoing communications, of the need to maintain confidentiality and WHICH CONTENT WITHIN COMMUNICATIONS WERE CONFIDENTIAL INFORMATION. Another related good practice after disclosing confidential information, is to summarize the confidential content in an e-mail to the parties. This serves as a record of what was actually discussed in the event of a legal battle in the future. It also reaffirms that you are serious about confidentiality.
  • Log of Recipients of Confidential Information (CI). Companies that receive CI often share it with employees that later leave the company. If your CI ever shows up elsewhere due to one of those employees, it'll be difficult to track it back the lead without knowing which employees had access to the CI. So, require the companies to keep a list of who was informed and when, and to provide that information within x days of the discloure. Again, this also sends the message that you are serious (and they need to be also) about maintaining confidentiality.

If you write the above items into an NDA, it's important to follow through with action, especially in regards to documenting CI. If you write these into an NDA without following through, you might be weakening your legal stand rather than strengthening it.

BTW, I have never seen state-specific language in an NDA (unless the NDA was part of a larger agreement).

answered Mar 7 '11 at 06:23
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Cesel
128 points

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