Non-Disclosure Agreement (NDA)

Service description

A non-disclosure agreement (NDA), also known as a confidentiality agreement, is a legally binding contract that protects sensitive information by requiring one or more parties to keep it confidential. Legal services play a crucial role in crafting, reviewing, and enforcing NDAs, ensuring they are comprehensive and legally sound.

Common industries

Applies to any business that shares confidential information outside the company.

ROI

A sound NDA protects trade secrets and your negotiating position at a fraction of the cost of litigating a leak.

Benefit

A properly drafted confidentiality agreement to protect sensitive information when dealing with partners, employees, or investors.

Why get it

Without a written agreement, a business must rely on trade secret law alone, which asks whether the information was kept secret and then misused. A clear NDA sets the rules before anything sensitive is shared.

When you benefit

Signed before each new disclosure; a business may reuse a standard form for many counterparties over time.

What it costs

Typically a flat fee.

When you pay

Counsel usually quotes a flat fee to draft or review one NDA, and bills hourly when a counterparty negotiates the terms heavily. Payment is usually due on delivery of the final agreement.

Other costs

None beyond the drafting or review fee, unless the business also wants employee confidentiality policies or contractor agreements.

Risks to know

State law decides how broadly an NDA may reach, so a form that works in one state may fail in another. Omitting the whistleblower-immunity notice from an employee or contractor agreement limits the company's remedies under 18 U.S.C. §1833(b), and a clause barring reports to the SEC conflicts with SEC Rule 21F-17. The Speak Out Act limits enforcing agreements signed before a sexual harassment or sexual assault dispute.

When risks arise

Drafting mistakes stay hidden until the NDA is tested, usually after the information has already been shared or leaked. The cheapest time to fix them is before the first disclosure.

The process

The provider learns what will be shared and with whom, then drafts or reviews the agreement: the definition of confidential information, permitted uses, the term, and the exclusions. The business reviews the draft and the provider negotiates it with the counterparty. The provider delivers a final version ready to sign.

Your commitment

The business decides what information it will share, with whom, and for what purpose, and whether protection should run one way or both. It should provide the counterparty's legal name and say how long the information will stay sensitive, since term and scope drive the drafting.

Documents to gather

• A description of the information to be shared and why
• The counterparty's legal name and contact details
• Any existing agreements with the same counterparty
• The business's current standard NDA, if it has one

Helpful reading

• non-disclosure agreement (NDA) — Legal Information Institute, Cornell Law School (Wex)
• Non-Disclosure-Agreements (NDAs) to Protect a Venture's Intellectual Property — World Intellectual Property Organization
• Frequently Asked Questions on Trade Secrets — World Intellectual Property Organization
• trade secret — Legal Information Institute, Cornell Law School (Wex)

Further research

• 18 U.S. Code § 1836 — Civil proceedings (Defend Trade Secrets Act)
• 18 U.S. Code § 1833 — Exceptions to prohibitions (whistleblower immunity and employer notice, subsection (b))
• 18 U.S. Code § 1831 — Economic espionage
• 42 U.S. Code § 19403 — Limitation on judicial enforceability of nondisclosure and nondisparagement contract provisions (Speak Out Act)
• 17 CFR § 240.21F-17 — Staff communications with individuals reporting possible securities law violations