What is a Non-Disclosure Agreement?
A Non-Disclosure (NDA) is a confidentiality agreement that is used to prohibit one party from disclosing protected information (proprietary business information or trade secrets) to any outside parties. If the party violates the non-disclosure agreement, they can be responsible for damages. A free NDA generator can help you quickly draft such an agreement. A non-disclosure agreement is typically paired with a non-compete agreement that prohibits one party from working in similar or the same industries for a certain period after the termination of the employment relationship.
Why Do You Need to Use a Non-Disclosure Agreement?
A non-disclosure is needed to protect your business’ confidential information that should not be disclosed to any outside party. Using a free NDA maker ensures that your agreements are thorough and cost-effective. There are two types of non-disclosure agreements:
- Unilateral (one-way) – this is where one party is disclosing protected information (employer to an employee). For example, in an employer-employee relationship, only the employee promises to protect the secret information. An investor or potential investor can also use it.
- Bilateral (two-way)/Mutual – this is where both parties are releasing confidential information to each other. This is common in situations like a joint venture or a merger.
When Do You Need to Use a Non-Disclosure Agreement?
There are many types of non-disclosure agreements. Everyday use for a non-disclosure agreement is for an employer that uses an independent contractor. This protects the employer from the disclosure of trade secrets and protected business information. Non-disclosure agreements can also be used when an entrepreneur presents a business idea to a potential investor or lender. Also, if you plan on sharing new technology, a non-disclosure can protect the disclosure of your ideas. Using a free NDA template simplifies this process, ensuring legal coverage. Other uses include marketing specialists or blueprints.
Here are some instances of when you may need a non-disclosure agreement:
- Inventions – A non-disclosure in this scenario can protect any ideas or technology you present to another party. This prohibits the party from “stealing” your ideas.
- Independent Contractors – A non-disclosure agreement can protect any information that an independent contractor may need access to from disclosing that information to another party. For example, a marketing specialist. The marketing specialist may work for more than one company. It is crucial that they not use any proprietary business information for another outside company.
- Employees – Employees typically need access to sensitive information to do their job properly. A non-disclosure agreement will protect the company’s trade secrets and prevent the employee from disclosing such confidential information.
- Potential Lenders – A company may seek lenders to ask for a loan for their business. A lender will need information such as a company’s business plan to determine if they want to present your company with a loan. A non-disclosure here also prevents the disclosure of any protected information to any outside party.
What are the Main Things That Go Into a Non-Disclosure Agreement?
It is essential to first identify the parties to the agreement. What party will be disclosing the confidential information (employer to employee, company to an independent contractor, company to a lender, etc.)? Next, list any information that you wish to keep confidential. Depending on what industry your company is in, the information you wish to protect will vary. Remember, if the information is public knowledge, it cannot be expected to be kept confidential. The effective date should also be included to document when the agreement officially went into effect. A NDA creator can guide you through these steps.
What are the Most Common Mistakes to Avoid?
A good practice pointer is to have the non-disclosure drafted and ready to be presented to a party before the start of the relationship. This protects everything on the front end. Using a free NDA generator ensures you avoid critical errors.
There are some pretty severe consequences of not using a non-disclosure agreement. So, when in doubt, draft it out!
It can be detrimental for a company if one of their employees used all of the business information from your company and started to use your confidential information against you. Not only that, but they will profit from it, causing you to lose money. Just imagine you have been working on an invention for years and years, and you decide to present it to an investor. Without a valid NDA, the lender may decide they like your idea so much that they want to use it for themselves. A non-compete prohibits the lender from stealing your idea. However, if they sign the non-disclosure agreement and they still use your idea, you are protected and have a legal remedy. Legal remedies for breaching a Non-Disclosure Agreement (NDA) include monetary compensation for damages and court-ordered actions, such as an injunction to prevent further violations.
Do I Need to Use a Lawyer, Accountant, or Notary to Help Me?
A non-disclosure agreement can be generated quickly and easily on our site without the assistance of a lawyer, accountant, or notary. You won’t need to worry about lawyer fees when you can create a non-disclosure here tailored specifically to your needs using an NDA generator. This will save you time and hard-earned money!
What is the Easiest Way to Create a Non-Disclosure Agreement?
You found it! A non-disclosure agreement can be created in a few easy steps on our site. Once you have your information ready, you can proceed to the next steps. We understand your time is precious and want you to have the protection you need. The non-disclosure form can protect your company, ideas, and future business ventures.
Why use our Non-Disclosure Agreement generator?
FormPros has done all the hard work for you, and our non-disclosure form generator can ensure you get the job done in record time. Also, your information is protected and ensures the confidentiality of your data. Let our NDA creator help you draft agreements effortlessly. Our subscription plan lets you generate unlimited non-disclosure agreements at a low cost that fits your budget. Let FormPros be your go-to site to get your non-disclosure just right! With our NDA maker, the process is both seamless and efficient.
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Non-Disclosure Agreement FAQs
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Can an NDA be enforced if it was signed electronically?
Yes, electronic signatures on an NDA are legally binding in most jurisdictions, provided they comply with e-signature laws like the U.S. E-SIGN Act.
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How long does an NDA remain valid?
The duration depends on the agreement terms. Some NDAs last indefinitely, while others have a set expiration, typically 2-5 years.
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Can an NDA cover verbal conversations?
Yes, an NDA can protect verbal exchanges, but it’s best to document confidential discussions in writing for stronger enforcement.
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What happens if a minor signs an NDA?
An NDA signed by a minor may not be enforceable. In such cases, a legal guardian or parent should co-sign to ensure validity.
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Does an NDA apply internationally?
An NDA can be enforceable internationally, but enforcement depends on local laws. Consider including jurisdiction and governing law clauses.
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Can I modify an NDA after signing?
Yes, but modifications must be agreed upon by all parties and documented in writing with proper signatures.
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Is an NDA necessary if I trust the other party?
Yes, even if trust exists, an NDA provides legal protection if circumstances change or misunderstandings arise.
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What if the NDA doesn’t specify a penalty for breaches?
Even without a penalty clause, legal remedies like injunctions or damages can be pursued through the courts.
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Can an NDA restrict someone from working in the same industry?
No, an NDA protects confidential information but does not prevent someone from working elsewhere. A non-compete agreement is needed for that.
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How do I terminate an NDA?
An NDA can be terminated through mutual agreement or if the contract specifies conditions for automatic expiration.