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Guide to Nondisclosure Agreements
Get it in writing to protect your business ideas and assets
Nondisclosure agreements can exist between various individuals and entities you do business with, including:
- Temporary or permanent employees
- Independent consultants or contractors
- Potential investors
- Prospective customers who might need access to proprietary information before making a purchase decision
Action Steps
The best contacts and resources to help you get it done
Find out if you need a nondisclosure agreement
Whether you need one depends upon the complexity of the relationships between you and other parties involved. It also depends upon the nature of the information you're seeking to protect, such as an invention, proprietary technology or financial information.
I recommend:
The American Bar Association has a listing of state bar associations — contact them to see if your state recognizes NDAs, which are contracts governed by state law. Search the Yahoo! directory of trade associations to learn how others in your industry handle NDAs.
State terms clearly
One key issue to resolve early on is whether the NDA is one-sided or mutual (if information will be shared by both parties). The information to remain confidential should be clearly spelled out, as well as any obligations on the part of any party, and the time period of the agreement.
I recommend:
Legal portal NOLO.com is a good resource for learning about what comprises a good NDA. Sample NDAs are available to study at the SCORE Web site and at AllBusiness.com.
Hire an attorney
Unless you're a contracts and liability expert, it's a good idea to seek legal assistance. If you do feel sufficiently capable, basic NDA forms are available for download at legal sites.
I recommend:
FindLaw.com and NOLO.com allow visitors to search for attorneys. NOLO.com also offers basic NDA forms for sale.
Tips & Tactics
Helpful advice for making the most of this Guide- Many major corporations, including Microsoft, have made their nondisclosure agreement forms available to the public for reference.
- Consider putting nondisclosure language in employee handbooks to emphasize their importance. It may not carry equal legal weight as a formal contract, but it will emphasize the need for trust among employees.
- If you leak key info at a meeting without an NDA, it's considered public disclosure.
- Consult an attorney to find out if you need to apply for patent protection in addition to drafting an NDA.
