FAQs

There are a few standard elements to NDAs, and a few elements that can be negotiated for complex transactions like mergers and acquisitions. EasyNDA is designed for every-day use. The elements of the "every day" NDA cover most cases leaving only a few cases where a negotiated, special-purpose NDA can be required.

• The entity names and addresses party to the agreement (entities).
• The date on which the agreement starts (effective date).
• How long (term) the parties are obligated to confidentiality after the agreement is terminated.
• What information is exchanged and why (purpose).
• The people who are signing the agreement on behalf of the entities (signatories).

Most commonly, NDAs are "mutual" - both parties agree not to disclose the information exchanged. A mutual agreement makes great sense since in almost every situation the two parties have a mutual interest in constraining confidential information.

In some cases, however, you might be asked to sign a one-way NDA. A one-way NDA contains only one party from disclosing information exchanged. Party A may disclose information to Party B who must promise to Party A not to disclose this information. Usually, one-way NDAs accompany a piece of information that is transfered non-verbally. Party A might send specification or a product plan to Party B - and Party B discloses no information to Party A.

There is a logical argument that one-way NDAs offer no real benefit over MNDAs since, even in the case of a one-way transmission of information from Party A to Party B, Party A's inclusion in an agreement not to disclose information from Party B (where no information is actually provided) are the "sleeves off the vest" of Party A yet provide a simple layer of protection to Party B should there be a subsequent communication exchange over the information. Starting with and MNDA covers the one-way case while also saving time and trouble by inherently covering future information exchanges in both directions.

An NDA is a contract in which the parties promise to protect the confidentiality of secret information that is disclosed during employment or another type of business transaction.

Yes. It is a contract because the two parties are voluntarily agreeing to create a mutual and legal obligation to exchange consideration.

• Offer and Acceptance: Because the parties reach mutual assent, the "offer and acceptance" criteria is met.
• Consideration: Each party is giving something of value: either information or the promise of not disclosing information.
• Intention to be legally bound: In commercial contracts, is is presumed that both parties intend to be legally bound and in NDAs, the signatures of the parties verifies this intention.

Proprietary information in this agreement is defined as information that the receiving party knows or has reason to know is confidential because it was identified as such verbally or in writing, or because of the nature of the information and context in which it was disclosed. Some information, such as strategy and pricing, is always considered proprietary.

The agreement itself is proprietary.

The agreement also covers affiliates of both parties and requires affiliates to have agreed in writing to comply with the parent parties’ obligations of confidentiality.

There are three stock purposes provided in the form. Together, they cover most situations; however, there are conditions under which a narrower purpose is desired, or one that is not covered by the three broad purposes. In that case, a custom purpose may be inserted.

The standard purposes are:

The agreement goes into effect on the Effective Date – that date on or before which proprietary information is first exchanged – and continues until the agreement is terminated.

The term of the agreement extends the obligations of confidentiality beyond the date the agreement is terminated by the length of the term.

Example: Your agreement has a two-year term and an effective date of 1/1/00. Four years later, on 1/1/04, you terminate the agreement. Your mutual obligation of confidentiality extends to 1/1/06.

Regardless of whether the agreement has been terminated or not, the responsibilities of confidentiality apply to both parties for the period of the term beyond the date on which proprietary information was disclosed.

Note about protecting Trade Secrets: When protecting trade secrets, consider that terminating the agreement will end the recipient's obligations of confidentiality for the disclosed trade secrets after the period of the term beyond the date on which the trade secret information was disclosed. When protecting trade secrets, take reasonable precautions to restrict access to trade secrets after expiration of the confidentiality term following termination of the agreement.

Excluded from protection under the agreement is information that was previously known, is independently developed, received from third parties, etc.

Also excluded from the agreement are both employees, and employees’ knowledge that is improved in the fields of the other party’s proprietary information.

Finally, this section makes it clear the agreement does not constitute an engagement for service or a business arrangement.

Recipients must use the same “reasonable care” to prevent unauthorized use or distribution of proprietary information as the recipient uses for their own proprietary information.

Duties also include:

The receiving party has no rights to the disclosed information except those rights needed for the purpose of the agreement.

Recipients must:

Here both parties confirm they have the right to make the disclosures, and at the same time, disclaim all other warranties or representations to the disclosed information.

The parties make no guarantees ('warranties') to the accuracy of any disclosed information.

"Jurisdiction refers to where a dispute will be resolved; governing law indicates which state's law will be used to decide the dispute. It's possible, for example, for a contract to require lawsuits to be filed in California but decided under New York law. The selection of which state is used for governing law is not often a crucial negotiating issue. But the selection of the state for jurisdiction can be more important: If there's a dispute, that's where everyone will have to go to resolve it. Sometimes these two provisions are grouped into one paragraph." Choice of Law Provisions in Contracts. Nolo Press

• Governing Law indicates which state's laws will apply to the agreement.
• Jurisdiction is the location where a dispute will be resolved. For example, an agreement can require the jurisdiction be California, where a lawsuit would be filed, while the lawsuit could be decided under governing laws of Delaware.

The "Entire Agreement" clause, sometimes called and "Integration" clause, defines what is and what is not part of the agreement. It says that the final agreement supersedes any terms discussed prior to the final agreement.

A faxed or e-mailed (fully executed) agreement is binding. The agreement does not have to be printed and mailed.

Both parties acknowledge that they each have had time and opportunity to have the agreement reviewed and negotiated by an attorney.

The Notices clause specifies (a) the from of notice, (b) how notice may be made, and (c) when a notice will be deemed to have been received.

• Notices must be in writing and may be delivered to the address on the agreement by a variety of forms of courier, carrier, post, or confirmed fax. Email does not count.
• See the agreement for how many days after sending that the notice will be considered as having been “served” for each delivery method.
• If either party needs to update the address on the agreement, the update must be made in writing to the other party (email does not count).

PIPEDA definitions

(1) An electronic signature is "a signature that consists of one or more letters, characters, numbers or other symbols in digital form incorporated in, attached to or associated with an electronic document";

(2) A secure electronic signature is as an electronic signature that

(a) is unique to the person making the signature;
(b) the technology or process used to make the signature is under the sole control of the person making the signature;
(c) the technology or process can be used to identify the person using the technology or process; and
(d) the electronic signature can be linked with an electronic document in such a way that it can be used to determine whether the electronic document has been changed since the electronic signature was incorporated in, attached to or associated with the electronic document.

ESIGN Act SEC 106 definitions

(2) ELECTRONIC - The term 'electronic' means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(4) ELECTRONIC RECORD - The term 'electronic record' means a contract or other record created, generated, sent, communicated, received, or stored by electronic means.

(5) ELECTRONIC SIGNATURE - The term 'electronic signature' means an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.

GPEA definitions

(1) ELECTRONIC SIGNATURE. — the term "electronic signature" means a method of signing an electronic message that —

(A) identifies and authenticates a particular person as the source of the electronic message; and
(B) indicates such person's approval of the information contained in the electronic message.

UETA Sec 2 definitions

(5) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(6) "Electronic agent" means a computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual.

(7) "Electronic record" means a record created, generated, sent, communicated, received, or stored by electronic means.

(8) "Electronic signature" means an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.