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Top 5 Tips for Drafting a Non-Disclosure Agreement

Not every company needs to use non-disclosure agreements (NDAs). Generally speaking, such legal documents are only needed when a company is trying to protect sensitive data that could undermine the success of the business if it were to get into the wrong hands (like competitors, for example). The type of information protected by a typical NDA could include anything covered under a patent, copyright, or trademark, just for starters. So if your company has a patented process in place for making a specific type of plastic, if you are working on software for the government, or you happen to have a secret recipe for BBQ sauce, you might want to make sure your employees, contractors, vendors, and so on aren’t out spilling the beans to competitors, the press, or anyone else for that matter. And having them sign an NDA can help to ensure this doesn’t happen, but only if you make the condition of the agreement very clear. So here are just a few tips to help you draft the iron-clad non-disclosure agreement your business needs.

  1. Include specifics on what is protected. The NDA is only as strong as the language used, so your document needs to include specifics about what information is protected. You’ll probably want to start with blanket coverage for any and all business being conducted by your company and its employees, partners, and clients. But you should also take the time to be specific, including details like the fact that employees are not allowed to reveal the names of clients under contract, or that they are barred from talking about specific projects they’re involved with before the details have been made public.
  2. Spell out conditions. The trick to making an NDA work lies in the conditions, which is to say, the punishment that will befall any anyone who breaks the confidence they have legally agreed to. In most cases there is some sort of fine attached, although jail may also be a possibility, depending on how privileged the information in question happens to be.
  3. Set dates. In addition to detailing information that employees agree not to divulge, you’ll need to set a date range for such confidences. While you can certainly make the deal open-ended, it might not matter if employees talk about projects once they have hit the market or the data has otherwise been made public. You might also include stipulations about employees that leave the company, forbidding them to reveal trade secrets to any competitors they may end up working for down the road.
  4. Establish rights. It’s important to include in your NDA that any protected information is the sole property of you, the employer. Your employees have no rights to data that is owned by your company, and that often includes anything they contribute or generate throughout the course of their employment.
  5. Hire a specialist. Your NDA can only protect you insomuch as you’ve got all your legal ducks in a row, so hiring a legal expert that specializes in creating such documents is probably in your best interest. If you want to learn more about creating your own NDA, there are plenty of templates and tutorials available online. But considering the importance of this type of agreement, hiring a pro is likely worth the cost.

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