Massachusetts NDA Template
Last Updated:
A Massachusetts NDA, or “nondisclosure agreement,” is a legally binding handshake between two or more parties. Its job is to clearly spell out the details they must not disclose. It's the invisible shield start-ups and businesses use to protect their trade secrets -like proprietary strategies or client contact lists- in case employees or potential partners take it into their heads to share sensitive information.
It's a proactive strategy for your business to prevent these vital details from spilling into public or competitor hands. Because let's face it, your business is unique and houses confidential information that keeps you ahead in the game. It's your responsibility to ensure that secret sauce remains secret, isn't it?
Trade Secret Definition in Massachusetts
“Trade secret,” specified or specifiable information, whether or not fixed in tangible form or embodied in any tangible thing, including but not limited to a formula, pattern, compilation, program, device, method, technique, process, business strategy, customer list, invention, or scientific, technical, financial or customer data that
(i) at the time of the alleged misappropriation, provided economic advantage, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, others who might obtain economic advantage from its acquisition, disclosure or use; and
(ii) at the time of the alleged misappropriation was the subject of efforts that were reasonable under the circumstances, which may include reasonable notice, to protect against it being acquired, disclosed or used without the consent of the person properly asserting rights therein or such person’s predecessor in interest. (Mass. Gen. Laws Ann. ch. 266, § 42(4))
Thank you for downloading!
How would you rate your free form?
Read on to learn more about Massachusetts NDAs, including:
What's included in a Massachusetts NDA?
Here are some key components that are typically included in a Massachusetts Nondisclosure Agreement:
-
Disclosing and Receiving Party
-
Definition of Confidential Information
-
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 world of non-disclosure agreements (NDA), there are two key roles - the "disclosing party," one who shares their confidential information, and the "receiving party," who receives the information. This is particularly true for one-way NDAs. For two-way NDAs (or mutual NDAs), it gets a bit more interesting as both parties take on both roles.
When identifying parties, remember to distinguish between an individual and a company. If you're engaging as an individual, stick to just using your name. No need to worry about a company name here.
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
Your NDA requires you to define clearly what comprises "confidential" information. Here's why: let's picture a boss telling their employee that every conversation for the coming two years is confidential. A year rolls on, the boss shares their weather prediction – rain tomorrow. Late-night chatter with a mutual pal includes the rain forecast, unbeknownst to the boss. Unintended breach of confidentiality? Hardly!
If confidentiality stipulations are too broad, you'll find a court won't uphold them, and too narrow may result in unintended disclosure. A standard definition works for most businesses; if unsure, always refer to our detailed guide on NDA confidential information specifics.
“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
Whether it's on a template or your finalized NDA, you've got to spell out the "reason" or "purpose" for the NDA. It could be product prototype development or assessment of business relationship prospects between parties, the purpose gets the receiving party lime-light on approved use of confidential information.
Take this scenario: You're hiring a web developer and sharing your business plans to give them a clearer picture of your website vision. You'd want to zero in the purpose connected to the site's particular elements under development. Without this, there would be nothing stopping them from establishing a similar business using your secrets.
However, most instances are well covered by the template language like "evaluating the parties’ capabilities of pursuing one or more business opportunities." Moreover, here's a general definition of purpose for you.
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
How you use your confidential information can and should tie to the purpose of the NDA. Essentially, the agreement states you’ll only use the confidential information in alignment with the stated purpose. Seems straightforward, right?
Consider a scenario where someone exploits the information outside the agreement's purpose. This segment of the NDA helps ensure the private nature of sensitive conversations, adding a layer of protection against external meddling or harm for both parties.
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
When sharing your valuable intel with the receiving party, what if the recipient is a company or needs to consult with their attorney? This common puzzle is sorted out in the "Limited Access" segment of your NDA.
In principle, you should consider those who genuinely need access to your data and limit its exposure to just these people. If the recipient has to share the information with anyone else, it is their responsibility that such person also signs an NDA adhering to identical terms.
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 subsequent section that beckons attention is “exclusions.” Including these in your NDA boosts the odds of its endorsement by a court, should things escalate to that level. Only consider removal of exclusion 4(a)(1) if you have already unveiled the confidential information to the recipient. Generally, the exclusions as given should work just fine.
(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
The validity or lifespan of an NDA is guided by its “term" clause. The NDA might only cover a single transaction, which lasts mere days or could be indefinite. The duration should reflect your anticipated relationship term. Remember, NDAs often last beyond the specific business relationship or transaction, essentially until the trade secret remains a secret.
Your agreement should ideally include a specific clause ensuring that trade secrets maintain their protection status—even post the termination of any business or contractual relationship. If you're scratching your head about duration, one to five years is a common choice. Just make sure the duration is adjusted to the period you require your information to stay 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 jumped the gun and already shared confidential information with the other party, there's no need to worry! We've got your back. You'll need to make a couple of revisions to our template, but it's nothing too complex.
How do I protect my trade secret?
Confidential information is the soul reason behind NDAs - they keep your secrets, well, secret! But it's important to note that not all confidential information is valuable. For it to be of any importance, it needs to qualify as a "trade secret." If you're feeling uncertain about the definition of a trade secret or how to correctly protect it, peruse our comprehensive guide for clarity.