New York NDA Template
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A New York NDA, or “nondisclosure agreement,” is essentially a legal agreement connecting two or more parties, outlining specific information you or the other parties are obliged to keep under wraps. This tool is particularly popular amongst startups and businesses as a safety net against those moments when employees, potential partners, and others may inadvertently - or intentionally - leak sensitive business details. This agreement serves as a security guard for your company's trade secrets and important information. Things like your unique business strategies or valuable client contact list are kept safely away from public eyes and competitors. Consider it a secret-keeper for your business!
Trade Secret Definition in New York
Senate Bill S3457, which would create an act governing trade secrets, is currently under consideration. (New York has yet to adopt an iteration of the Uniform Trade Secrets Act. NY Senate Bill S3457)
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Read on to learn more about New York NDAs, including:
What's included in a New York NDA?
Here are some key components that are typically included in a New York 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
Let's break down who's who in an NDA. In a unilateral NDA (one-sided), the "disclosing party" spills the beans, meaning they provide the private information. On the flip side, the "receiving party" is, well, catching those beans or receiving the information. It gets a bit trickier with mutual NDAs since both parties play double-duty, both giving and getting information. And when it comes to the name game, if you're an individual involved in these dealings, just use your personal name. No need to include a company name if there isn't one.
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
Each NDA needs its own dictionary, defining what classifies as "confidential" information. Just think about it - if an employer said "Everything I tell you equals top-secret confidential info for the next two years", we'd have a problem. What if he shared his belief about tomorrow's weather forecast? Surely that couldn't be confidential. A court wouldn't uphold such a broad confidentiality clause. But be careful! If you classify too narrowly, you could unwittingly disclose something you intended to keep under wraps.
Most businesses lean on a tried-and-true template definition. If you're unsure, we've got a deep-dive post on defining confidentiality in your NDA.
“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
You'll find a storyline in every NDA - the "purpose." Clarifying the purpose outlines the 'why' of exchanging confidential information. Consider hiring a web developer; sharing your business plans allows them to visualize the website to build. To protect your info, you'd focus the purpose clause around the specific tasks the developer will handle. This clause prevents them from using your secrets to twin your business model.
Most often the generic clause ("evaluating the parties' capabilities of pursuing one or more business opportunities") suffices. Have a look at this standard purpose definition.
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
Your purpose in signing an NDA directly relates to how you use this treasure trove of information. Simply put, you can use the information solely for the described purpose. This clause blocks exploitation and maintains the sanctity of these private communications. It serves as a shield against harmful external forces.
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 you hand over your information to the 'Recipient', who exactly gets it? What if the recipient is a corporation? Or maybe they want to run it by their lawyer? The 'Limited Access' section of your NDA covers these situations.
Above all, consider who needs to be privy to this information and restrict its use to those individuals. If the recipient shares it with anyone else, ensure the new individual also signs an NDA with similar 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
Every NDA has its 'No Fly Zone' – the “exclusions.” Adding these increases the chances of your NDA standing up in court if the situation arises. The only one you might want to remove is 4(a)(1), especially if you've already let some confidential info slip to the recipient. As is, these general exemptions should cover you in most instances.
(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
Here's where we lay out the lifespan of the NDA, which can range from a brief few days for a single transaction to an indefinite period. Ideally, the timeline should cover the duration of the expected relationship, often extending beyond the specific transaction or affiliation. Remember, for as long as the trade secret stays a secret, the NDA stays in effect.
It's usually a good idea to ensure protection of the trade secret even after concluding any business associations or contracts. If you're in a bind about what to put here, a period of one to five years is fairly standard. But remember, the tastiest bit here is ensuring the timeline matches your need for said information to remain a secret.
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?
Did you prematurely disclose some confidential information? Take a deep breath, because you're set! We have your back. Just tweak the template a bit to suit these circumstances. Here's how you can do it.
How do I protect my trade secret?
So, why use NDAs? The main aim is to secure your classified information, shaping up a part of your larger trade secret strategy. The actual value of this confidential information, however, lies in it qualifying as a trade secret. If you're unsure about what a trade secret is, whether your information meets the criteria, or how to shield your trade secret properly, we have a detailed guidebook ready.