Further down in this article, you can find a non-disclosure agreement — template ready for downloading. It is one of the documents concluded and signed to protect the brand from unintentional information leakage. What is an NDA and what should it include?
What is a non-disclosure agreement (NDA)?
A non-disclosure agreement (NDA) is a document (contract) concluded between at least two parties who undertake to maintain secrecy regarding specific information, i.e. not to disclose it to unauthorized persons.
The NDA can be drawn up in various situations, e.g. during the conclusion of an employment contract or a business partnership. In the case of managing freelancers, companies sign an NDA, when the employment is related, for example, to the launch of a new product (service) or when as part of a job, confidential information is made available to the contractor.
Difference Between a Non-Disclosure Agreement (NDA) and a Confidential Disclosure Agreement (CDA)
Commonly, NDA and CDA are used interchangeably, but it is worth noting that there is a difference between them, which concerns the purpose of the contract. A CDA (confidential disclosure agreement) is usually concluded by parties who want to establish cooperation with each other (e.g., as part of a merger) and thus disclose confidential information to each other. On the other hand, the NDA is intended to protect certain information and keep it secret from unauthorized persons.
What should the non-disclosure agreement include?
The law does not specify the elements of a non-disclosure agreement — however, it should contain key sections that, if included in the agreement, will protect the interests of the company.
Parties to the agreement
This part of the document should precisely specify and list the persons covered by the contract so that they can be clearly identified. It is often the case that the other party of the NDA is not one person (e.g. a company representative), but all its employees. Such information must also be included in the agreement. It is also important that enterprises are properly specified, i.e. in the case of companies with an extensive legal structure, it is necessary to specify which of its entities is the owner of confidential information.
Confidential information
It is a very important element of the NDA because it defines what the contract is really about. A common mistake is defining confidential information too broadly. It should be defined as precisely as possible so that, if disclosed, it can be easily demonstrated that the data leaked constituted confidential information.
Exclusions of Confidentiality
This element intends to identify information that is not confidential, meaning that it is not subject to a duty of secrecy. This may be, for example, information that is commonly known or the reveal of which the company has consented to.
Appropriate use of information
The company that provides the other party with access to confidential information must also determine how this data can be used. Therefore, this element determines on what terms and to what extent information may be disclosed to third parties.
Duration of agreement
The parties may agree that the agreement will be in force for a certain or indefinite period. However, it is recommended that this period be closed within a specific time frame. The contract concluded for an indefinite period can be terminated, which may be unfavorable for the enterprise. On the other hand, indefinite contracts are usually impractical because most confidential information becomes obsolete over time.
Therefore, the most advantageous option is to conclude an agreement for a specified, sufficiently long period without the possibility of its early termination.
Contractual penalties
The agreement should also regulate the consequences of breaching the obligation of secrecy and how they will be enforced. As a result, in such a situation, the company can pursue claims more easily against the party that disclosed the confidential information.
NDA agreement and cooperation with freelancers
It is worth signing a confidentiality agreement if you hire freelancers. The main reason is that subcontractors cooperate with many companies. Therefore, it is good to protect confidential information against even unintended and unintentional reveal. So if you care about confidentiality when working with subcontractors, then you will be pleased to know that Useme also offers a solution to sign a non-disclosure agreement template.
Signing NDAs with freelancers is a widely known practice, as evidenced by the statistics quoted by freelancermap.com. According to the survey results, 74.7% of respondents confirmed that they are asked by companies to sign a confidentiality agreement before starting a new project.
Non-disclosure agreement (NDA) template for freelancers (PDF + Word)
Enter your email address to receive a sample NDA non-disclosure agreement in PDF, Microsoft Word and Google Docs:
Conclusions
A non-disclosure agreement allows companies to safeguard their interests by minimizing the risk of the other party sharing confidential data. However, remember to include in the document the elements described above. You can then be sure that your non-disclosure agreement — template to download above — has been properly prepared.
If you’re a business owner, you might also want to read how to optimize company costs.
