Create (and automate) non-disclosure agreements (NDAs) more efficiently with this free template, to enable colleagues in the business to self-serve on this routine contract at scale.
Over a third of the US workforce is bound by a Non Disclosure Agreement, according to studies. If you havenât signed one already, the chances are youâve heard of them. They are an important tool for businesses that want to keep their confidential information private.
But what are NDAs, who uses them, and how can you create one? Let's find out
A Non Disclosure Agreement is a a legally binding agreement that outlines what information can and cannot be disclosed, and to whom, creating a confidential relationship between the parties involved.
Parties use this type of business contract to agree on which confidential or sensitive information theyâd like to share with each other, but prevent from being shared with third parties.
In doing so, NDAs offer privacy when it comes to sensitive or proprietary information, like commercial terms, product information, and trade secrets. They are often also called confidentiality agreements.
One look at the news tells us that Non Disclosure Agreements are becoming increasingly commonplace, with some high-profile celebrities even encouraging their partners to commit to this level of formalized confidentiality.
But the most common and important use of NDAs doesn't feature on the front page of the papers.
Non Disclosure Agreements remain a critical tool for businesses, enabling information to be shared in a safe and confidential way. In fact, NDAs are amongst the most common commercial agreements, with applications everywhere from sales and finance to employment and publishing.
But with growing use, creating and reviewing NDAs at scale can quickly become a problem for legal teams at fast-growth businesses, who often report feeling buried in low-value work.
The main difference is that a unilateral Non-Disclosure Agreement is a confidentiality agreement that only binds one side of the contract to protect the other party's confidential material, while a mutual Non-Disclosure Agreement involves a commitment from both parties to protect each other's confidential material.
Make sure you know which type of NDA you're signing before you put pen to paper (or rather electronic signature - no need for wet signatures in 2024).
As we mentioned already, there are plenty of instances where a Non Disclosure Agreement might be shared between parties. But when should you actually use an NDA?
Well, the most common use cases of NDAs include:
When you hire a new employee within your organization, they will naturally require access to confidential and proprietary information about the business in order to do their job. To ensure that this information remains confidential, employers tend to ask an employee to sign an NDA prior to starting their new job, or taking on a new project. This is usually provided in a package with other HRÂ contracts, like their offer letter, or even as a separate employee confidentiality agreement.
Highly confidential information will often also be shared in the pursuit of a new business partner, in a bid to get them on board. These details can cover everything from privately held data to a new business idea, product or invention. To prevent the prospective partner from taking the idea and exploring it themselves, an NDA is used to secure the ideas in some way.
While you can insert some confidentiality clauses into your partnership agreement template, it's wise to cover this in greater detail if you want enhanced protection.
When you begin working with a new customer or client, you may be sharing information that youâd prefer to keep confidential with them. This could be anything from details about a new product that youâre trialling or information about your software. If you donât want the secrets getting out, you can cover them in a generic non disclosure agreement.
When seeking funding from an investor, you will need to be as transparent as possible about your companyâs financial situation, business strategy and product. However, this information is rarely shared externally, so it's essential that you put an NDA in place to protect this information once shared. Â
You should get this in place before you sign a lending agreement, business loan agreement, loan modification agreement, or payment agreement.
In the course of business, you may be receiving services from a company or consultant who requires access to sensitive information about your business. In many cases, these service providers will also work for plenty more clients just like yourself. Therefore, it is crucial that you secure this confidential information with an NDA, or in detail within a service contract - particularly if they work with your competitors, too.
Want more tips on managing service contracts? Check out this detailed guide to service contract management.
Due to their ubiquity, NDAs affect numerous teams in various different ways. Different teams and individuals will need to send out NDAs, depending on the use case. These teams will often include sales, legal, HR, finance, operations and procurement. If you have confidential information that you need to protect, you are already a potential user.
However, you may find that legal counsel will often create and own the NDA templates, and they will usually have approval rights too.
Note that NDAs can be mutual or unilateral. Find out more about unilateral vs bilateral contracts.
The information that your NDA covers will depend on the needs of your business and how you choose to operate. However, certain categories of information almost always warrant protection.
Here are some common examples of NDA-protected information:
Non Disclosure Agreements are legal contracts, which means that they are enforceable by law and within courts - so long as they are written correctly and contain the usual elements of a contract.
However, confidentiality clauses will not be legally binding if they are used to prevent whistleblowing in the public interest, which often involves telling the authorities about illegal or dangerous practices at work. According to the Law Society, an NDA could also not be legally binding if an individual hasnât had adequate time to think about it before signing.
It is also worth noting that certain US states take a more generous approach when ruling on NDAs. For example, California is among the US states that appear to value an employeeâs mobility over protectionism. This can be seen in cases where Californian courts have struck down confidentiality agreements that are too broad.
With all of this ambiguity surrounding NDAs, it is important to get yours right the first time. Hereâs our advice...
Finding a way to create and process NDAs at scale is important for any fast growth business. Whether youâre experiencing difficulty deciding what your NDA should include or youâre simply unsure where to start, agreeing confidentiality agreements can quickly become a bottleneck that holds your team back. Creating a robust non disclosure agreement template, like the one linked above, is a great first step.
Creating a comprehensive NDA is key to ensuring that your companyâs private information remains protected against exposure. Therefore, it is critical that you include all of the important information and necessary clauses within your NDA.
Not sure what to include? Well, in addition to the basic elements of a contract, an NDA will typically include the following provisions:
Your NDA should include basic information about the parties involved and the people that the agreement will cover. This should refer specifically to the different groups and individuals involved in the agreement.
When drafting your NDAs, you need to set out a clear scope of what information needs to be kept confidential, and a definition of what confidential information means.
This may vary between parties and case uses, but each and every NDA needs to define clearly which materials are deemed confidential, as well as the more specific details such as whether oral conversations, written notes and documents fall within the scope of confidentiality.
You should also define what isn't confidential, as some details cannot be kept confidential in certain circumstances. It is important to distinguish between what is covered and what is not.
As with all contracts, NDAs should clearly define the contract's duration. This can either be a clear and measurable duration, such as two years, or it can be indefinite, meaning that there is no set end date for the agreement, and the information should remain confidential indefinitely.
Whilst NDAs are designed to prevent confidential information from being disclosed, there are a few instances where disclosure is unavoidable.
For example, if disclosure is required in the event of legal proceedings or after being demanded by the government, the parties to the contract will have a legal obligation to disclose the information, regardless of the agreement. This is something that should be made clear to all parties within the NDA itself.
An NDA will also usually set out what exclusions to the confidential clause will be. For example, if the information is publicly known, it will be excluded from the NDA. These clauses may also outline who the recipient of the NDA can legally disclose the information without breaching the agreement.
Breaches of confidentiality can happen, either intentionally or as a mistake. Therefore, it's important that your NDA includes details on what happens if the contract is breached, as well as what remedies will be available to the injured party.
This section will typically address the consequences of a breach of confidentiality, which can differ depending on the situation and grant a right to remedies for the disclosing party.
An NDA should also outline what jurisdiction(s) the legal agreement will be governed under if a breach of confidentiality did occur. This is particularly important in agreements that cross borders.
Depending on the situation, some NDAs may require additional clauses on issues like severability and future contract amendments, all of which should be outlined from the offset.
Creating an NDA from scratch can be difficult. At its worst, the process looks something like this:
A user in the business emails a member of the legal team and says âI need an NDA.â The legal counsel, likely buried in work, suggests that the user finds it themselves on the shared drive; she might eventually relent and email one across.
Somehow, the user finds a template (not necessarily the most current version), fills in various fields in square brackets and emails it to the legal team to review. Legal corrects various details and returns it to the user via email.
The user then sends the NDA to the counterparty for negotiation. They comment and mark up the contracts in Word, emailing it back. If there are still disagreements over the terms, each party will redline the document and pass it back and forth, typically saving and sharing a new document each time.
Eventually, an agreement is reached and both parties sign, either with a wet signature and a sign/scan/send process or an eSignature provider. This tends to be either Adobe Sign or DocuSign or a DocuSign competitor the company pays for separately.
Once signed, the NDA will be emailed to the relevant parties and stakeholders (legal, sales, and so on), and hopefully saved on a shared drive.
Our customers have experienced all of the following before automating their NDA workflow:
Modern, growing businesses are increasingly looking to automate routine contracts like Non Disclosure Agreements. By moving your NDA to a contract automation platform, you can save time, cut out cross-platform hassle and free up the legal team's time for high-value work.
With Juroâs automated templates, you can generate simple NDAs in seconds. Hereâs how:
In most businesses, legal counsel will want to retain control over what is included in an NDA, and how they are used. Within an automated workflow, in-house lawyers define and revise the terms of the NDA using a contract template.
From here, other departments can self-serve on contracts from the template without altering the key language of the confidentiality agreement.
At Juro we see a wide variety of business users self-serving NDAs from templates. Most often, this activity will come from the sales teams, who send NDAs along with MSAs (Master Services Agreement) and order forms to new prospects.
HR teams also commonly automate and send NDAs to new employees or contractors; or in the media industry, journalists and editors might send NDAs to ensure exclusivity for a story.
In an automated workflow, parties can use the Q&A flow on an NDA template to enter key data in smartfields, such as the counterpartyâs name and email address, the contractâs effective date, and so on. This data will then autopopulate the contract, making the NDA seamless and searchable.
If you want to quickly amend or redraft NDA clauses during negotiations or review, you can also use Juro's AI contract generator functionality to automate this redrafting.
Although NDAs have many applications and are comparatively low-risk, itâs important that legal teams retain control and oversight of terms.
NDAs are seldom heavily negotiated, but it can happen, and the decision-makers as to those negotiations still need to be legal personas. By setting up an approval workflow in the contract management platform, legal teams can make sure they still have the opportunity to review each contract before it goes out.
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Parties can use secure electronic signatures to sign Non-Disclosure Agreements online, quickly and safely. The authorized signatories for NDAs wonât vary too much from other kinds of contracts - they could range from sales managers and contract managers to CEOs depending on the size and structure of the company. If you're worried about the legality of eSignatures, don't fret.
Electronic signatures are widely accepted in most jurisdictions, and we've got lots of content on global eSignature laws for you to get stuck into.
For too many businesses, getting an NDA over the line means hunting through a shared drive to find an up-to-date template, tracking changes in Word, negotiating over email, signing in DocuSign and then trying to make sense of where to store it. This is frustrating, time-consuming and prone to mistakes. Just find one platform that can handle templating, contract generation, negotiation, signature and management. Your company accounts will thank you, too.
In the old days, a signed NDA would be locked away in a storage cabinet somewhere, never to be found again. Even with the manual creation of NDAs, lots of tools means lots of files, and lots of files means that your NDAs can be easily lost, or misplaced, resulting in data loss.
A contract tool that works with contracts as dynamic, digital data models can get rid of this risk. This is because they can ensure that every piece of data from your NDA is structured and searchable from day one.
You will never have a problem with version control again, and all of your NDA's can be stored in one centralized contract repository.
If you choose to automate your NDAs with Juro, here are just a few of the innovative features you can use to improve your NDA workflow for all of the parties involved:
When Juro customers begin automating their NDA workflow, the benefits are immediate. They include:
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If managing standardized NDAs is becoming a bottleneck for your business, consider exploring contract automation solutions like Juro. An all-in-one platform can help you create, manage, and track payment agreements efficiently, freeing up time for more strategic tasks.
Only Juro offers a flexible, integrated and truly end-to-end contract platform for all teams to use - not just legal. That's why businesses like Trustpilot, Deliveroo, Remote, Angellist, and Quantumscape use Juro to manage their contracts.
Interested in joining them? Book a personalized demo today.
A mutual Non-Disclosure Agreement (NDA), also known as a bilateral NDA, is a legal contract entered into by two parties, where both parties agree not to disclose certain confidential information shared between them. A unilateral NDA, on the other hand, only sees one party agreeing not to disclose the other party's confidential information.
A mutual NDA is often used when both parties expect to exchange sensitive information; for example, in potential partnership discussions, collaborations, or joint ventures. The question as to whether your NDA template needs to be mutual depends on the relationship you'd like to have with the other party, and the arrangements you'd like to make for the protection of your confidential information.
Some categories of information will not fall under the scope of an NDA, these are often referred to as exclusions from confidentiality treatment. These exclusions typically include:
If a party believes the terms of an NDA to be unenforceable, it is advisable to contact legal counsel for advice before proceeding. Certain circumstances will invalidate an NDA, and certain types of information can't be protected by an NDA - if you think this might be relevant, talk to a lawyer.
Contracts are legally binding and parties commit to be bound by their terms. However, there have been many high-profile instances of the validity of NDAs being questioned and parties being released from their confidentiality agreements. It is advisable to seek advice from a lawyer before taking any action.
If you are signing an NDA with a party in a different country, you will need to ensure that the NDA outlines which jurisdictionâs laws will govern the agreement. You will also need to make clear which courts the agreement can be enforced in, to eliminate any confusion.
If you breach a confidentiality agreement, there may be a whole host of remedies available to the other party. To find out more, check out this post on what happens if you break an NDA.
A non disclosure agreement will last for the period specified in the legal agreement. However, the most common non disclosure agreement period is between 3 or 5 years, according to the UK government.
That said, certain confidential information could be kept confidential forever, such as a list of customers, or non-patentable know-how. Each non disclosure agreement should outline how long the confidentiality must last. Once this period has drawn to a close, the party will be able to use and disclosure the information.
When deciding how long your non-disclosure agreement should last for, you ought to think realistically about your business goals and strategies, as well as how long the relationship with the other party will last in general.
It is important to ensure that the right individuals are signing the NDA on behalf of themselves or their company. These individuals will often include directors, officers or anyone else with the necessary authority to make such agreements.
However, more broadly, Non Disclosure Agreements can be signed by prospective employees, new clients, and other businesses.
Under English law, non disclosure agreements generally donât need to be witnessed in order to be valid and enforceable. There may be some exceptions to this rule though, like if the document has been executed as a deed, instead.
An NDAÂ is not the same as a confidentiality agreement. Explore the differences in more detail in NDA vs confidentiality agreement comparison.
If NDAs are a pain point for your business, and contract volumes are growing faster than legal headcount, then it might be time to explore contract automation as a solution.
Juro is an all-in-one contract automation platform that helps visionary legal counsel and the teams they enable to agree and manage NDAs (and other contracts) in one unified workspace.
If you're ready to find out more, hit the button to book a focused demo.
Juro is the #1-rated contract platform globally for speed of implementation.
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