CHAPTER 19
Sample Non-Disclosure Agreement WHAT ONE KNOWS IT – ROMAN PROVERB
IS SOMETIMES USEFUL TO FORGET.
IN MANY SITUATIONS,
a company will find itself in a situation where it wants, or needs, to disclose confidential information regarding its business activities to a prospective business partner. However, a firm will not want to get bogged down in negotiations over the terms and conditions of a long-form confidentiality agreement. In such cases, the company should present the receiving party with a “short-form” non-disclosure agreement, which covers all of the basic issues necessary to protect the company’s rights. This would include such items as the definition of the protected information or receiving party’s obligations to protect the confidential information and return it to the company upon request. If, after initial disclosures, it appears that a great deal of confidential information will be disclosed, then a new long-form agreement might be appropriate, provided that the new agreement also covers information which was disclosed under the umbrella of the short-form agreement.
A D V I S O R Y : Planners should bear in mind the previous caveats regarding the reluctance of some readers to sign any such documents, and the legal enforceability of non-disclosure agreements in cross-border situations. N O T E : Consideration should be given to the fact that non-disclosure agreements may
be either invalid or not carry much weight in cross-border situations. Also, the relevant governing law may be that of an administrative division of a country rather than that of the country itself. For example, in this sample agreement, clause 10 refers to the “Governing Law” of a state. You will need to modify your agreement to include the correct legal administrative division of either country, state, province, etc.
NON-DISCLOSURE AGREEMENT THIS AGREEMENT is made by and between [Name of company], a [State or Country of incorporation] corporation (hereinafter the “Company”), and the undersigned (hereinafter the “Receiving Party”). RECITALS Company is in the business of [Type of Business] and Receiving Party is in the business of [Type of Business]. Company and Receiving Party desire to enter into confidential negotiations with respect to [Purpose of Negotiations] (the “Business Purpose”). In order to pursue the mutual Business Purpose, Company and Receiving Party recognize that there is a need for the Company to disclose to Receiving Party certain of its confidential information to be used only for the
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