South Dakota NDA Template
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A South Dakota NDA, or “nondisclosure agreement,” is a legal pact between two or more entities that outlines the information that you and other involved parties are obliged to keep under wraps. Startups and businesses often resort to NDAs as a safety net to keep their confidential information safe, particularly when dealing with employees, potential business allies and so on, who might unintentionally or deliberately spill the beans. NDAs serve as a shield to safeguard your organization's trade secrets and other sensitive data - ranging from your strategic business plan to your customer contact database - from public revelation or getting into the hands of rivals.
Trade Secret Definition in South Dakota
“Trade secret,” 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. (South Dakota Uniform Trade Secrets Act § 37-29-1(4))
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Read on to learn more about South Dakota NDAs, including:
What's included in a South Dakota NDA?
Here are some key components that are typically included in a South 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
Defining the parties is a crucial step in any NDA. The party sharing the confidential information is known as the 'disclosing party', while the party receiving this knowledge is called the 'receiving party'. This holds true for a unilateral NDA where information flows one way. In a mutual NDA, both parties fit both roles. Remember to differentiate between 'Company Name' and 'Individual'. If you're sharing or receiving information as an individual, use your name instead of a company 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
Deciding what counts as 'confidential' in an NDA can feel like walking a tightrope. You want to cover important aspects without going overboard. Imagine if your boss declared that everything they mention over the next two years was confidential, and you shared the seemingly innocent fact with a friend that it's going to rain - would this be a breach of confidentiality?
It's clear that such extreme definitions aren't feasible or legally enforceable. However, an overly specific definition might also pose a risk, as it could lead to unintended violation of the NDA. To avoid such pitfalls, most businesses opt for a standard definition as seen in our template. For further help in defining confidential information, consider reading our detailed guide on the topic.
“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
The 'Purpose' section in an NDA outlines why the agreement exists, and how the confidential information can be used. A developer hired to create a website, for instance, would receive your business plans to understand the nature of the site they need to build. In this case, the purpose would be tied closely with the website's development.
Without a clearly stated purpose, the developer might be able to use your confidential information to start a company similar to yours. More often than not, the language in the template (intended for evaluating business potential between the parties) is satisfactory. However, for unique scenarios requiring precision, a tailored purpose statement is recommended.
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
The way confidential information is utilized is often tied closely to the NDA's purpose. The agreement ensures the knowledge is only employed for its intended purpose and cannot be wielded to harm the disclosing party. This clause forms the core of why NDAs exist in the first place - to make sure your information stays safe and isn't exploited.
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' in your NDA is a company? Or needs to consult their legal adviser? The 'Limited Access' section addresses these concerns. Contemplate who truly needs access to the information and limit it accordingly. Ensure whoever gets access from the recipient also signs an NDA, to keep your information secure.
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
An integral part of NDA is its 'exclusions' section. This part can greatly increase the chance of an agreement holding up in court. Scrutinize the provided exclusions and see if they work for you. You may want to remove section 4(a)(1) if you’ve already shared some confidential information with the recipient.
(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 'term' or duration of a Non-Disclosure Agreement (NDA) varies on the basis of the relationship it supports. It could be for a short-lived transaction or last indefinitely. Typically, the agreement is effective longer than the relationship or transaction itself, covering the period for which the trade secret needs to remain concealed.
It's smart to include a clause which ensures that the trade secret stays protected even after the completion of a business deal or contractual obligation. If you're unsure about the term, know that the average NDA lasts between one to five years. The important point is to keep your confidential information protected for as long as necessary.
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?
Have you already shared some confidential material with the other party before getting an NDA on board? No need to worry! There are still ways to protect your information. Certain parts of the template can be adjusted to guard you against potential issues related to previous disclosures. If you're unsure what to do, here's how you should go about that.
How do I protect my trade secret?
The motivation behind using NDAs is to safeguard valuable confidential information, which often forms a part of trade secret. However, not all information qualifies as a trade secret. If you're unsure about the qualification and protection of your trade secrets, refer to our comprehensive guide on the subject. Remember, a trade secret's real worth lies in its ability to give your business a competitive advantage. Employ an NDA to help protect this advantage.