North Dakota NDA Template
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A North Dakota NDA, or “nondisclosure agreement,” is a secret-keeper deal between you and others. It serves as your safety net, ensuring important details about your business stay under wraps. Startups and businesses use NDAs to safeguard their interests if there's a risk of their private information being shared by employees or potential business associates. An NDA does a grand job of shielding your company's golden nuggets like trade secrets, business strategies, and client lists from landing in unwanted hands or worse still, your competitors.
Trade Secret Definition in North Dakota
“Trade secret” means information, including a formula, pattern, compilation, program,
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. (North Dakota Trade Secrets § 47-25.1-01(4))
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Read on to learn more about North Dakota NDAs, including:
What's included in a North Dakota NDA?
Here are some key components that are typically included in a North Dakota 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 this part of an NDA's language, two roles are clearly defined - the disclosing party and the receiving party. Simply put, the disclosing party is the one sharing the confidential information and the receiving party receives it. Now, for mutual NDAs, both parties, interestingly, play both roles - sharing and receiving secrecy. If you are a sole proprietor or an individual involved in an NDA, not a company, simply use your name in the relevant sections.
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
In any NDA, you need to clearly outline what exactly is 'confidential.' Picture this - your boss tells you all communications for the next two years will be confidential. Now, if a year into it, your boss mentions possible rain tomorrow and you later tell your friend about the rain - did you disclose confidential info? Obviously not! Courts would never support an over-arching clause like this.
Yet, at the same time, defining the confidential too tightly could lead to unintentionally leaking crucial secretive details. A standard definition template is typically used by most businesses, but you can always deepen your understanding by reading our detailed post on defining 'confidential' in NDAs.
“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
Every NDA requires defining the 'purpose' of signing it. Could be for creating a prototype for the share of information or to assess the possibility of a potential business association. The purpose of an NDA becomes the reason for the recipient to utilize the confidential info.
Consider hiring a developer for your website. You'd share some business plans to help him tailor the website. Thus, the purpose of your NDA would be connected to 'website development' - describing the specific website parts the developer would work on - safeguarding against your developer using your provided information to create a similar business and profit from your knowledge.
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
How you intend to use the 'confidential' information is intrinsically linked to the 'purpose' for signing the NDA. This clause says that you'll use the classified info only for the defined purpose. While it seems like a given, this provision secures sensitive discussions, protecting both parties from potential external harm.
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
What if the 'Recipient' of your information is a company? Or needs a lawyer's involvement? The 'Limited Access' section of your NDA handles such scenarios.
As a cautious measure, think about who precisely needs to know the info and restrict its use to them - ensuring anyone else the recipient shares the information with also accepts an NDA under 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
The 'Exclusions' section identifies what doesn’t fall under the NDA. Having these clear exclusions makes your NDA more likely to stand in court if the need arises. The standard exclusions usually work 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 section determines the NDA's active duration, which could be a short transaction span, or even indefinite. Typically, an NDA outlasts the actual transaction or relationship, often as long as the trade secret is kept.
It's typically wise to include a clause ensuring the trade secret's protection even after the relationship ends. If you're uncertain, remember the average term is one to five years - but always ensure the duration aligns with your need for confidentiality.
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?
Don't fret if you've already shared some confidential information - we've got your back! There's a way to modify the template to take care of this detailed on this guide.
How do I protect my trade secret?
NDAs protect your valuable information, which is a major part of your trade secret. But remember, confidentiality itself isn't precious - it needs to qualify as a trade secret to hold value. Check our guide if unsure about trade secrets or how to adequately safeguard them.