How to write a Non-Disclosure Agreement?
Are you looking to create a non-disclosure agreement? Learn how to write a non-disclosure agreement with this guide; it will help you to understand how to protect your confidential information.
What is a Non-Disclosure Agreement (NDA)?
A legal contract is often called a confidentiality agreement. It describes how organisations or parties will share information or ideas in confidence.
Non-disclosure agreements are used for various purposes, including employment agreements, sales, procurement, agreements with suppliers and other functions. They ensure businesses protect their intellectual property and trade secrets from competitors. Legal departments are often stretched thin and need more resources to manage the daily demand for a review of NDAs and other common agreements.
What are the benefits of NDAs for employers?
Non-disclosure agreements can keep certain things an employee knows about the organisation confidential. It can also prevent sharing of trade secrets or proprietary information from current or former employees. An NDA can help protect competitive advantage.
What are the key elements that should be included in an NDA?
First, you must ensure you have named all parties in the non-disclosure agreement. Five other key features must be included in your NDA to ensure it’s legally binding, including a description of confidential information, obligations of the parties involved, any exclusions, the term of the agreement and consequences of a breach.
You don’t need a lawyer to create the agreement, but you may need someone with legal expertise to review it. We recommend consulting with a legal expert to ensure your agreement fully protects your organisation’s interests when the document is first created. After this, minimal changes are needed from one use to the next. For example, you might use the same template every time you onboard a new employee.
Description of Confidential Information
The agreement's scope should cover what is considered confidential. It’s often best to make this section fairly broad so you can cover everything someone could reasonably expect to be confidential and protect both your organisation and any intellectual and proprietary information.
Requirements and obligations of the parties
Add a section that outlines the parties' obligations to keep the information confidential. In most cases, this requires taking steps to prevent access to information by others. This section needs to be clearly defined, and you may ask legal experts to overview this to make sure you are covered for breach of contract.
Typically, information already in the public domain is not included in the non-disclosure agreement. This may also outline where it’s ok to share information because it’s required in the ordinary course of business with related third parties.
The term of the agreement
This will include the length of the term of the agreement. So, how long can a Non-Disclosure agreement last?
The terms and conditions of a nondisclosure agreement vary widely. Some may extend indefinitely, while others may be limited to a specific time period, like five years.
Your non-disclosure agreement should also outline what would happen if a non-disclosure agreement was breached. The consequences of a breach could result in legal action, including financial compensation or taking out a legal injunction.
How do I create a non-disclosure agreement?
To create an NDA simply and quickly, use a pre-existing non-disclosure agreement template like the pre-approved templates from DocuSign. You should simply:
- Log in to DocuSign and choose the NDA Template
- Edit the template to include a description of the confidential information and the scope of the agreement
- Add the requirements of each party
- Add the specific consequences of a breach
- Add the details of all involved parties and send the agreement for signing
Discover more about using DocuSign templates.
For common, repeatable transactions, such as onboarding new employees, pursuing a sales prospect or onboarding new suppliers and contractors, organisations can generally use standardised non-disclosure agreements without needing a lawyer each time.
What types of information can be protected by an NDA?
Key things that an organisation needs to keep confidential can be included in an NDA. These could include trade secrets, proprietary information, confidential data, sensitive information, formulas, product designs, business or marketing strategies, customer lists, financial information, manufacturing processes, research and development, prototypes, or customer information.
What information is not protected by an NDA?
Generally, any information that could already be accessed in the public domain or anything considered general knowledge is not included.
What can invalidate a non-disclosure contract?
Non-disclosure agreements can sometimes be invalid if the language or conditions used are too broad, the information described is already in the public domain, or a third party has become aware via other means other than your disclosure. It may also be invalid if signed by someone that didn’t have the required authority.
Create a non-disclosure agreement with DocuSign by signing up for a trial of DocuSign eSignature.