Rhode Island NDA Template
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A Rhode Island NDA, or “nondisclosure agreement,” is a legal arrangement formed between two or more parties. This contract outlines the information that you and the other party (or parties) agree to keep confidential. NDAs are practically life-savers for both startups and established businesses, ensuring they have a safety net in case employees or potential business associates decide to leak the business's classified information. NDAs serve as protectors, guarding your company's trade secrets and other valuable data, such as your business strategy or client database. The goal is to keep this privileged information away from public eyes or rival companies, maintaining your competitive edge.
Trade Secret Definition in Rhode Island
“Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(i) 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
(ii) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. (Rhode Island Uniform Trade Secrets Act § 6-41-1(4))
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Read on to learn more about Rhode Island NDAs, including:
What's included in a Rhode Island NDA?
Here are some key components that are typically included in a Rhode Island 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 an NDA, you'll find two key roles: the disclosing party and the receiving party. The disclosing party is the one sharing sensitive information, while the receiving party is receiving that confidential info. Unilateral NDAs involve one disclosing and one receiving party, whereas mutual NDAs see both parties sharing and receiving information. If you're an individual (without a company) in either role, simply use your name.
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
It's crucial to define what information is considered "confidential" in your NDA. Imagine an employer labeling all information shared over two years as confidential, only to argue over casual weather conversation disclosure with an employee. A court wouldn't uphold such a vague clause.
On the other hand, if the definition is too narrow, you risk having undisclosed essential information shared by the receiving party. To avoid uncertainty, use a standard definition like the one in our template or consult our in-depth post about defining confidential information 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
When drafting an NDA, you'll need to outline its purpose. This could be something like "manufacturing a prototype product for the disclosing party" or "evaluating potential business relationships." The purpose clarifies why the recipient is permitted to use the confidential information.
Let's say you hire a developer to build your website and share your business plans. You'd want to narrow the purpose to be in connection with the development, describing the specific website elements that the developer will create. Without defining this purpose, the developer could use the information to establish a competing company.
In most cases, the template language (evaluating business opportunities) will suffice. For more insight, check out our generic purpose definition.
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
The confidential information's usage is tied to the NDA's purpose. This clause states that the information will only be used for the intended purpose. While it may seem obvious, including this provision ensures confidential information isn't exploited, thus preserving both parties' privacy and protecting them from potential 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
Sharing information with a "Recipient" might raise concerns if they are a company or need to consult with lawyers. The "Limited Access" section of your NDA addresses these issues. In most cases, the template language will work.
Generally, you should consider who needs to know the information and restrict access accordingly. If the recipient needs to disclose information to someone, they should ensure that person signs an NDA with the same 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
Your NDA should include a section on "exclusions" to enhance the likelihood of it being upheld in court. The only exclusion to consider removing is 4(a)(1), and only if you've already disclosed confidential information to the recipient. Generally, the exclusions written in the template should work.
(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 addresses the NDA's term or duration. The NDA could cover a specific transaction lasting a few days or last indefinitely, depending on the relationship scope. Often, an NDA's term extends beyond the transaction or relationship duration to protect trade secrets as long as they remain secrets.
It's wise to include a provision stating the protection of trade secrets, even after the business relationship or agreement terminates. Unsure of what duration to choose? Most NDAs last between one to five years—just ensure it lasts long enough to maintain 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?
If you've already shared confidential information with another party, don't worry! You can tweak the template in a couple of places to address this situation.
How do I protect my trade secret?
The primary goal of NDAs is to shield your confidential information. However, confidential information alone isn't valuable—it's part of the trade secret equation. To make it valuable, it must qualify as a trade secret. To learn about trade secret qualifications, how to protect them, and whether your information qualifies, review our guide on the issue.