Kentucky NDA Template
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A Kentucky NDA, or “nondisclosure agreement,” is a legal agreement involving two or more parties that specifies which information must remain confidential. Startups and businesses use NDAs to protect themselves, just in case employees or potential partners attempt to reveal their confidential data. NDAs help safeguard your company's trade secrets and other valuable information, such as your business strategy or client list, from being exposed to the public or competitors.
Trade Secret Definition in Kentucky
“Trade secret” means information, including a formula, pattern, compilation,
program, data, device, method, technique, or process, that:
(a) Derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use, and
(b) Is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy. (Kentucky Uniform Trade Secrets Act § 365.880(4))
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Read on to learn more about Kentucky NDAs, including:
What's included in a Kentucky NDA?
Here are some key components that are typically included in a Kentucky Nondisclosure Agreement:
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Disclosing and Receiving Party
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Definition of Confidential Information
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NDA Purpose
- Use of Confidential Information
- Limited Access to Confidential Information
- Exclusions - What's not Covered
- Term of Confidentiality Period
1. Disclosing and Receiving Party
In the realm of NDAs, we have two critical roles - the "disclosing party," who is the provider of confidential information, and the "receiving party," who obtains the confidential data. However, when it comes to mutual NDAs, both parties simultaneously take on the roles of discloser and receiver. Keep an eye out for the differentiating terms between a "Company Name" and "individual." If you're an individual partaking in the exchange of information, whether giving or receiving, simply use your name, especially if you don't own a company.
This nondisclosure agreement (this “Agreement”) is dated [Date] (the “Effective Date”) and is between [Company Name of Disclosing Party; e.g. “Max Studios, LLC”; if you do not have a formal legal entity, use your legal name, e.g. “Max Smith”], (the “Company”), and [Company Name of Receiving Party; if receiving party does not have a formal legal entity, use their legal name] (the “Recipient”).
2. Definition of Confidential Information
When creating your NDA, it becomes essential to specify what info characterizes as "confidential." This requirement is pretty simple to comprehend; think about an employer who tells you, "All that I share with you in the coming two years is confidential." Now, fast forward a year to you planning on quitting your job, and your boss mentions assuming it will rain tomorrow. You later remember this weather update to a mutual acquaintance.
Did you reveal classified information? Certainly not! A court wouldn't uphold such a vast confidentiality clause. However, contrary, if you narrow down the definition excessively, you might unintentionally disclose private information, which the receiving party can reveal to anyone. Most businesses stick to a standard definition, similar to the one in our template, but you can delve into our detailed post on defining confidential information in your NDA if uncertain.
“Confidential Information” means any information that is proprietary or unique to the Company and that is disclosed by the Company to the Recipient during the term of this Agreement, including the following: trade secret information; matters of a technical nature such as processes, devices, techniques, data and formulas, research subjects and results; marketing methods; plans and strategies; information about operations, products, services, revenues, expenses, profits, sales, key personnel, customers, suppliers, and pricing policies; and any information concerning the marketing and other business affairs and methods of the Company which is not readily available to the public. “Confidential Information” also includes information of others that (1) is disclosed under this Agreement, (2) the Company is obligated to protect from disclosure or restricted from using or both, and (3) that would constitute “Confidential Information” if the information belonged to the Company.
3. NDA Purpose
Any NDA, including the one in our template, calls for a clarifying "purpose". This could be "developing a prototype for the disclosing party," or "evaluating potential business relations between the parties." The purpose is consequential as it defines how the recipient can utilize the classified info.
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
Your reasons for signing an NDA directly influence how you can utilize the confidential information. This section essentially says that the confidentially categorized data should only be used in relevance to the purpose. While the notion seems straightforward, imagine someone using your confidential information to disrupt your company's performance? This provision exists to ensure intimate conversations are kept under wraps, safeguarding both parties from potential threats or damages.
The Recipient shall use Confidential Information only for the Purpose. Unless otherwise agreed in writing, neither party shall disclose to a third party the fact that discussions or negotiations are taking place concerning the Purpose or any of the terms or other facts relating to the Purpose, including the status of negotiations between the parties.
5. Limited Access to Confidential Information
In sharing your details with the “Recipient,” what if the Recipient is an entity? Or they need to consult a lawyer urgently? The “Limited Access” clause in your NDA takes these scenarios into account. While the template's language should be adequate, it's crucial to consider who should accurately be privy to the confidential data, and limit the knowledge to those people. Anyone who the recipient might share classified information with should also sign an NDA abiding by the same rules.
The Recipient shall protect the Confidential Information from unauthorized use and disclosure using the same degree of care that it uses with respect to its own information of like importance, but no less than a reasonable degree of care. The Recipient shall retain the Confidential Information in confidence and shall not disclose Confidential Information to any third party without the Company’s prior written consent. However, the Recipient may disclose the Confidential Information to employees, contractors, consultants, and authorized representatives of the Recipient who (1) require access to the information for the Purpose, (2) are informed by the Recipient of the Recipient’s obligations under this Agreement, and (3) are bound by contract or fiduciary duty to obligations of confidentiality and use restrictions with substantially similar function, purpose, scope, and effect to those of this Agreement and that are at least as protective of the Confidential Information as this Agreement.
6. Exclusions - What's not Covered
The next phase in your NDA delves into "exclusions." By setting exclusions, you heighten the chances of a court validating your NDA during possible disputes. The only exclusion you might rethink is 4(a)(1), only if you’ve already shared confidential information with the recipient. Nevertheless, the mentioned exclusions should be perfect for most cases.
(a) This Agreement imposes no obligations upon the Recipient with respect to Confidential Information that: (1) was known to the Recipient before disclosure by the Company as evidenced by contemporaneous records; (2) has become publicly available through no fault of the Recipient; (3) is disclosed to the Recipient by a third party that has the right to make the disclosure to the Recipient and that does not have any obligation of confidentiality with respect to the Confidential Information; or (4) is disclosed by the Recipient with the Company’s prior written consent.
(b) If the Recipient is required by any governmental agency, court, or other judicial or regulatory body to provide any Confidential Information received under this Agreement, then the Recipient will not be deemed to be in violation of this Agreement for the disclosure if the Recipient promptly gives written notice to the Company of the requirement to provide the Confidential Information and cooperates with the Company so that the Company may contest the requirement to provide the Confidential Information. The Recipient may disclose only that portion of the Confidential Information that it is legally required to furnish.
7. Term of Confidentiality Period
This clause singles out the duration or the effective period for which the NDA will be valid. It could either serve a single transaction lasting a few days or remain effective indefinitely. The agreement typically spans the anticipated relationship. Often, the NDA outlives the transaction or relationship to remain effective as long as the trade secret remains secret. Your objective should lean towards ensuring the trade secret stays guarded even after ceasing contractual relationships or business ties. If you're unsure about the specifics, remember that the typical duration ranges between one to five years. The timeframe should correspond with the duration you desire for the information to remain confidential.
This Agreement will continue for a period of one year from the Effective Date unless: (1) terminated earlier by either party upon written notice to the other; (2) extended by the mutual written agreement of the parties; or (3) superseded by a subsequent written agreement that explicitly sets forth the obligations of the parties with respect to Confidential Information. With respect to business information, the Recipient’s obligations of confidentiality and non-use under this Agreement will expire three years from the termination of this Agreement. With respect to all information that constitutes a trade secret, the Recipient’s obligations of confidentiality and non-use under this Agreement will survive the termination of this Agreement for as long as such information remains a trade secret under applicable law.
What happens if I've already disclosed confidential information?
If you've let slip some sensitive details before the NDA was confirmed, there's no need to worry! We've got you covered. Check out our comprehensive guide on how to do just that.
How do I protect my trade secret?
The motive behind utilizing NDAs pivots around protecting your confidential information. However, this confidential information alone isn't of much value unless it forms a part of the trade secret equation. To assign value to the info, it has to qualify as a trade secret. If you're not certain about the prerequisites of a trade secret or how to aptly protect your trade secret, check out our guide on this matter.