A Non Disclosure Agreement (“NDA”) is an agreement that protects the secret information of businesses, Executives, and business owners. It helps in preventing someone from revealing secret knowledge. An NDA is intended to create a personal link between the owner of confidential information and the information receiver. Parties involved in such a confidential relationship are legally obligated to keep the knowledge confidential.
When both parties sign the nondisclosure agreement, a legally enforceable contract is created that aids in ensuring the secrecy of the sensitive information. Before writing your own NDA, be sure you understand how to create one. This article will help the reader to learn more about the creation of NDA.
How to draft a Nondisclosure Agreement: Important Clauses
You may want to supplement or compose or draft non disclosure agreement. The following are the standard clauses you should include, along with their definitions:
1. Parties Making the Disclosure and Receiving the Information
Begin your NDA by identifying the “Parties” to the Agreement. There are two parties involved in the NDAs. The person or an entity that shares information is referred to as the “Disclosing Party.” Whereas the individual or organization that receives information is referred to as the “Receiving Party.”
A mutual NDA (also known as a bilateral NDA) protects both parties’ private information. Both parties act as the Disclosing and Receiving Parties under this arrangement.
2. Specify Confidential Information to be protected
Specify which the nondisclosure agreement covers secret information once the Parties have been formed. Typical instances of sensitive information that an NDA protects include the following:
- Trade secrets include manufacturing processes, pharmaceutical test data, computer program designs and drawings, and commercial information such as distribution techniques, supplier and customer lists, and advertising plans.
- In case of the purchase or license of a product or technology.
- When workers have access to private and sensitive information.
- When presenting a proposal to a prospective partner or investor.
- When receiving services from a business that has access to confidential data.
These are just a few examples of the kinds of information you may want to keep private under the terms of your NDA. Your Agreement may include as many or as few pieces of confidential information as necessary. Still, it would be best to be explicit about the knowledge that the Receiving Party is not allowed to reveal.
Being precise about the material covered by an NDA ensures that it will hold up in court if a legal issue arises.
3. Confidential Information Exclusions
An “Exclusions” provision specifies the types of information that the NDA does not cover.
A nondisclosure agreement does protect the information that is:
- Publicly known at the time of disclosure or becomes publicly known through no fault of the Receiving Party;
- Discovered or created by the Receiving Party before disclosure by the Disclosing Party;
- learned by the Receiving Party through legitimate means other than from the Disclosing Party or Disclosing Party’s representatives; or
- Disclosed by Receiving Party with the Disclosing Party’s consent.
4. The Receiving Party’s Obligations:
The core of a Non disclosure agreement is a declaration that establishes the parties’ confidential relationship. The statement outlines the Receiving Party’s obligation to preserve the information’s confidentiality and restrict its usage. Often, this obligation is expressed in a single sentence: “The Receiving Party shall hold and maintain the Disclosing Party’s Confidential Information in a confidential manner for the sole and exclusive benefit of the Disclosing Party.” In other cases, the provision is more detailed and may include obligations to return information.
- Non-Solicitation clause:
Neither Party may recruit or offer employment to the other’s workers, nor may either Party divert business away from the other.
- Contractual Term
How long is a person’s obligation to maintain confidentiality? The example agreement includes three different approaches: an unlimited period that ends when the knowledge no longer qualifies as a trade secret; a fixed duration of time; or a combination of the two. The NDA should specify in clear terms how long it will be in effect. The Time Frame comprises the date on which the commitment to keep private information secret becomes effective (the “Effective Date”) and the period during which the protected information cannot be disclosed with outsiders (the “Disclosure Period”). Typically, the Parties agree on the Agreement’s termination date (referred to as the “Termination” clause). For instance, a non disclosure agreement may expire when:
- The Agreement becomes null and void;
- The Transaction is executed; or
- A specified time period has expired.
- Non-competition Clause:
Under this clause, the Parties undertake not to engage in commercial activities that compete directly with the other Party. Numerous businesses elect to have partners and staff sign separate nondisclosure and non-compete agreements.
- Non-Circumvention Clause:
If the Disclosing Party shares business connections, a non-circumvention provision prohibits the Receiving Party from circumventing the Agreement and doing business or participating in company with those contacts directly.
- Jurisdiction Clause
The Jurisdiction clause specifies the state under whose laws the non-disclosure agreement is governed. If one party leaks or improperly uses private information and a lawsuit results, the laws of the agreed-upon state apply, and any trials or hearings will take place in that state.
Bear in mind that various states have varying approaches to NDAs. California, for example, does not recognize non-compete agreements.
- Signed documents and Attestation
Lastly, your NDA must be signed by each Party and their Representatives. Other individuals (e.g., directors, officers, employees, agents, or advisers) who may disclose, receive or safeguard information connected to the Transaction described in the NDA are representatives.
- Additional Clauses
Depending on the circumstances, your NDA may contain additional provisions or components seen in other types of contracts. It may include, but is not limited to, a choice of law provision, the statute of limitations clause, choice of jurisdiction clause, arbitration clause, and merger or integration clause. There are nondisclosure agreements that include restrictive covenants or non-compete provisions.
UAE Non-Disclosure Agreements Legalization/ Notarization
Before discussing your business ideas with a service provider, you must sign a non disclosure agreement. The parties to the Agreement are obligated to maintain confidentiality for the duration specified in the Agreement. The parties to the Agreement are obligated to maintain secrecy for the time set in the Agreement. You must have a written agreement and have it attested by a Notary Public in the UAE to protect your legal rights if anybody attempts to violate the terms and conditions. To ensure that your NDA is enforceable in the UAE, Notary Public Dubai staff can assist you with legalizing it. Contact us now for more information!