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Non-Disclosure Agreement

In business, there are numerous instances in which you have to share confidential information with another party. For example you have a business idea. In order to execute the idea you will have to share the idea with potential partners, investors or employees.

Startup companies with a new and profitable idea can only succeed if what they are working on remains under wraps. But the key to doing so safely is making sure that the other party is bound to respect the confidential information you provide them and not use it in a way that is detrimental for your business.

Inorder to keep a lid on the sensitive information, a non-disclosure agreement, or NDA, alternatively referred to as confidentiality agreements (CA), confidentiality statements, or confidentiality clauses is signed between two parties.

A Non-Disclosure Agreement is typically put to use while disclosing confidential information to potential investors, creditors, clients, or suppliers. Some people might not like the idea of signing a non-disclosure agreement saying “Don’t you trust me?” But without such a signed agreement, any information disclosed in trust can be used for malicious purposes or be made public accidentally. NDA is a promise between two or more parties that the information conveyed will be maintained in secrecy.

The confidentiality of the information is maintained for a specified period of time as mentioned in the agreement. But once the information is made public, that loses it’s “confidentiality” people will be free to disclose the information.

Types of Non-Disclosure Agreements:  

The specific content of each Non-disclaimer agreement is unique as it will relate to details of specific information, proprietary data involved and what is being discussed. In general there are two types of non-disclosure agreements.

  1. Unilateral Non-disclosure agreement: A unilateral agreement binds only one party to the agreement for example a company signs a unilateral non-disclosure agreement with an employee. Employee agrees not to disclose or reveal confidential information learnt while on the job. The majority of NDAs fall under these category and are intended to protect a business trade secret. Researchers and professors at research universities or at R&D department in the private sector are at times required to sign an NDA before they carry out research with the business or university that supports them.
  2. Mutual non-disclosure agreement: A mutual non-disclosure agreement is typically executed between two parties exploring a possible business arrangement or a joint venture or some other possible merger that might have a mutual benefit to both parties.7 Simple Ways You Can Protect Your Idea From Theft

 

NDA legal binding, Non-Disclosure Agreement, purpose of a confidentiality agreement

Non Disclosure Agreement NDA Contract Sample

Free Sample Non-Disclosure Agreement for Startup Businesses 

This Non-Disclosure Agreement is a sample provided for information only and may not be relied upon as legal advice.  This agreement might not be appropriate as per your requirements . There is NO warranty about the suitability of this sample agreement. Please consult your legal or business advisor for further information or advice.

NON-DISCLOSURE AGREEMENT (NDA)

 

THIS AGREEMENT

is made on

 

[Month, day, year]

BETWEEN

[the Disclosing Party], (the “Disclosing Party”); and

[the Receiving Party], (the “Receiving Party”),

collectively hereinafter referred to, individually, as the “Party” and collectively, as the “Parties”)

Background:

i)The Parties are, or will be, evaluating, discussing and negotiating a potential contractual relationship concerning the ___________________________________ ______________________________________________________ (the ‘Project’).

ii) The Parties may, in these evaluations, discussions and negotiations, disclose to each other information that is technically and /or commercially confidential.

iii) The Parties have agreed that disclosure and use of such technical and/or commercial confidential information shall be made and on the terms and conditions of this Agreement.

iv) The Receiving Party understands that the Disclosing Party has disclosed or may disclose information relating to […….. ], which to the extent previously, presently, or subsequently disclosed to the Receiving Party is hereinafter referred to as “Proprietary Information” of the Disclosing Party.

Now it is agreed as follows:

Definitions:

In this Agreement the following terms shall, unless the context otherwise requires, have the following meanings:

‘Disclosing Party’ means the Party disclosing Confidential Information to the other Party under this Agreement.

‘Receiving Party’ means the Party receiving Confidential Information from the other Party under this Agreement.

‘Confidential Information’ means any information, which shall include but is not limited to, design, fabrication & assembly drawings, know-how, processes, product specifications, raw materials, trade secrets, market opportunities, or business or financial affairs of the Parties or their customers, product samples, inventions, concepts and any other technical and/or commercial information, disclosed directly or indirectly and in any form whatsoever (including, but not limited to, disclosure made in writing, oral or in the form of samples, models, computer programs, drawings or other  instruments) furnished by the Disclosing Party to the Receiving Party under this Agreement.

OPERATIVE PROVISIONS

1. In consideration of the disclosure of Proprietary Information by the Disclosing Party, the Receiving Party hereby agrees:

(i) to hold the Proprietary Information in strict confidence and to take all reasonable precautions to protect such Proprietary Information (including, without limitation, all precautions the Receiving Party employs with respect to its own confidential materials),

(ii) not to disclose any such Proprietary Information or any information derived therefrom to any third person,

(iii) not to make any use whatsoever at any time of such Proprietary Information except to evaluate internally its relationship with the Disclosing Party, and

(iv) not to copy or reverse engineer any such Proprietary Information. The Receiving Party shall procure that its employees, agents and sub-contractors to whom Proprietary Information is disclosed or who have access to Proprietary Information sign a nondisclosure or similar agreement in content substantially similar to this Agreement.

2. Without granting any right or license, the Disclosing Party agrees that the foregoing shall not apply with respect to any information after five years following the disclosure thereof or any information that the Receiving Party can document

(i) is or becomes (through no improper action or inaction by the Receiving Party or any affiliate, agent, consultant or employee) generally available to the public, or

(ii) was in its possession or known by it prior to receipt from the Disclosing Party as evidenced in writing, except to the extent that such information was unlawfully appropriated, or

(iii) was rightfully disclosed to it by a third party, or

(iv) was independently developed without use of any Proprietary Information of the Disclosing Party. The Receiving Party may make disclosures required by law or court order provided the Receiving Party uses diligent reasonable efforts to limit disclosure and has allowed the Disclosing Party to seek a protective order.

Immediately upon the written request by the Disclosing Party at any time, the Receiving Party will return to the Disclosing Party all Proprietary Information and all documents or media containing any such Proprietary Information and any and all copies or extracts thereof, save that where such Proprietary Information is a form incapable of return or has been copied or transcribed into another document, it shall be destroyed or erased, as appropriate.

The Receiving Party understands that nothing herein (i) requires the disclosure of any Proprietary Information or (ii) requires the Disclosing Party to proceed with any transaction or relationship.

The Receiving Party further acknowledges and agrees that no representation or warranty, express or implied, is or will be made, and no responsibility or liability is or will be accepted by the Disclosing Party, or by any of its respective directors, officers, employees, agents or advisers, as to, or in relation to, the accuracy of completeness of any Proprietary Information made available to the Receiving Party or its advisers; it is responsible for making its own evaluation of such Proprietary Information.

The failure of either party to enforce its rights under this Agreement at any time for any period shall not be construed as a waiver of such rights. If any part, term or provision of this Agreement is held to be illegal or unenforceable neither the validity, nor enforceability of the remainder of this Agreement shall be affected. Neither Party shall assign or transfer all or any part of its rights under this Agreement without the consent of the other Party. This Agreement may not be amended for any other reason without the prior written agreement of both Parties. This Agreement constitutes the entire understanding between the Parties relating to the subject matter hereof unless any representation or warranty made about this Agreement was made fraudulently and, save as may be expressly referred to or referenced herein, supersedes all prior representations, writings, negotiations or understandings with respect hereto.

This Agreement shall be governed by the laws of the jurisdiction in which the Disclosing Party is located (or if the Disclosing Party is based in more than one country, the country in which its headquarters are located) (the “Territory”) and the parties agree to submit disputes arising out of or in connection with this Agreement to the non-exclusive of the courts in the Territory.

Non-Disclosure of Confidential Information:

In consideration of the disclosure of Confidential Information by the Disclosing Party to the Receiving Party solely for the Purpose, the Receiving Party undertakes whether by itself, its successors and heirs, not to disclose Confidential Information to any third party, unless in accordance with Clause ….

Use of Confidential Information

The Receiving Party is entitled to use the Confidential Information but only for  the Purpose.

Permitted Disclosure of Confidential Information:

The Receiving Party may disclose in confidence Confidential Information to any of its Affiliates and employees, in which event the Affiliate and employee shall be entitled to use the Confidential Information but only to the same extent the Receiving Party is permitted to do so under this Agreement.     

The Receiving Party agrees that such Affiliates or employees are subject to confidentiality obligations no less restrictive than those of this Agreement.   

The Receiving Party shall limit the dissemination of Confidential Information   of its Affiliates and employees having a need to receive such information to carry out the Purpose.

The Receiving Party may disclose Confidential Information to its consultants, contractors, sub-contractors, agents or similar persons and entities having a need to receive such information to carry out the Purpose on the prior written consent of the Disclosing Party. In the event that the Disclosing Party gives such consents, the Receiving Party agrees that such individuals are subject to confidentiality obligations no less restrictive than those of this Agreement.

Non-Disclosure of Negotiations:

Except as provided in Clause[ ], each Party agrees that it will not, without the other Party’s prior written approval, disclose to any third party the fact that the Parties [      ] are discussing the Project. The Parties acknowledge that the provisions of  [      ] this Agreement shall apply in respect of the content of any such discussions. The undertaking set forth in this Clause  […] shall survive the termination of this Agreement.

Term and Termination:

This Agreement shall become effective on the Effective Date. The provisions of this Agreement shall however apply retroactively to any Confidential Information, which may have been disclosed in connection with discussions and negotiations regarding the Project prior to the Effective Date.

This Agreement shall remain in force for five (5) years from the Effective Date, except to the extent this Agreement is superseded by stipulations of the Contemplated Agreement. The  rights  and  obligations  of  each  Party  with  respect  to  all Confidential   Information of the other Party that is received under this Agreement shall remain in effect for a period of five (5) years from the date of disclosure of Confidential Information.

Intellectual Property Rights:

All Confidential Information disclosed herein shall remain the sole property of the Disclosing Party and the Receiving Party shall obtain no right thereto of any kind by reason of this Agreement.

Future Agreements:

Nothing in this Agreement shall obligate either Party to enter into any further Agreements.

Amendments:

Any amendment to this Agreement shall be agreed in writing by both Parties and shall refer to this Agreement.

Severance:

If any term or provision in this Agreement is held to be either illegal or unenforceable, in whole or in part, under any enactment or rule of law, such term or provision or part shall to that extent be deemed not to form part of this Agreement, but the validity and enforceability of the remainder of this Agreement shall not be affected.

Governing Law:

This Agreement shall be governed by and construed in accordance with the laws of India and in any dispute arising out of or relating to this agreement, the Parties submit to the exclusive jurisdiction of the Courts situated at Delhi, India.  

In the event of a breach or threatened breach by the Receiving Party of any  provisions of this Agreement, the Disclosing Party, in addition to and not in  limitation of any other rights, remedies or damages available to the  Disclosing Party at law or in equity, shall be entitled to a temporary  restraining order / preliminary injunction in order to prevent or to restrain any  such breach by the Receiving Party, or by any or all persons directly or  indirectly acting for, on behalf of, or with the Receiving Party. 

IN WITNESS WHEREOF, this Agreement was duly executed on behalf of the Parties  on the day and year first above written.

  

[Disclosing Party] [Receiving Party]
By: _________________________________ By: _________________________________
Name: ______________________________ Name: ______________________________
Title: _______________________________ Title: _______________________________
Address: ____________________________ Address: ____________________________
Date: _______________________________ Date: _______________________________

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7 Simple Ways You Can Protect Your Idea From Theft