The content of a specific NDA will depend on which entities and in what situation it is concluded. A different type of contract will be concluded in a bilateral professional relation, and another in an employer-employee relation.
While concluding an NDA, it is worth asking what the entrepreneur actually considers to be confidential information that should be protected and for what reason. The use of ready-made templates, without taking into account the specifics of a given business, may not provide the entrepreneur with an appropriate level of protection. The NDA agreement should refer to the actual operating conditions of a given entrepreneur or company. There is no single, universal NDA template that can be used in every case.
While entering into an NDA, keep the following in mind:
This part is not mandatory in any contract, but many times it helps to put it in context. It happens that the preamble is also helpful in indicating the consensual intention of the parties while concluding the contract. In the case of an NDA, it may refer to the purposes for which the agreement was concluded.
2.2. Indication whether the confidentiality obligation applies to one party to the contract or to both parties
In this section, it is worth indicating who provides confidential information to whom in connection with the started conversations, negotiations, concluded agreement or cooperation. The NDA can be unilateral and bilateral.
2.3. Determining of the scope of information considered as confidential
This is one of the most important points of the NDA. It is worth remembering that the contract should refer to information that the entrepreneur treats as confidential. An NDA that stipulates the confidentiality of any information provided to the other party may not provide much security in the end. The scope of information defined as confidential is to correspond to what the entrepreneur actually wants to protect in connection with a given transaction, contract, cooperation or negotiations. Concluding a contract that aims to protect information freely disclosed by the entrepreneur to the public misses the point.
2.4. Determining how to handle confidential information
The NDA should also outline the proper handling of confidential information by the party to whom it is disclosed. It is essential to consider various aspects such as:
- the particular people to whom this information may be provided (e.g. employees, associates, persons with whom an NDA agreement has been signed, or persons who have been obliged to keep information confidential on a different basis),
- precautions necessary for the transfer of information (procedural requirements, necessary consents, security measures, passwords, acceptable information carriers).
It is also worth indicating what should happen to the confidential information provided after the parties’ cooperation ends. These are issues such as, for example, data carriers on which confidential information was located and an indication of whether they will be subject to return, disposal, etc. It is also possible to require the parties to submit separate statements in connection with the return of documents or media containing confidential information (e.g. specifying that these are the only copies on which this information has been recorded).
2.5. Specifying the duration of the confidentiality obligation
The content of the NDA should indicate how long the confidentiality obligation applies to. It may concern the duration of the main contract in connection with which the NDA is signed, or the duration of negotiations or cooperation between the parties. In practice, most often this period is also extended for the time after the termination of the contract (end of negotiations or cooperation of the parties).
2.6. Indication of what behavior constitutes a breach of the confidentiality agreement
The agreement may also specify the type of behavior that will be considered as a breach of the confidentiality obligation, as well as indicate the required course of action of the party in case of such a breach. In this event, it is possible to introduce a requirement to inform the other party of the breach of the confidentiality obligation or to take action to prevent further breaches or remove the effects of existing breaches.
2.7. Determining the consequences of breaching the confidentiality obligation
NDAs often also contain provisions that define the consequences of a breach of the confidentiality obligation. The related consequences may take the form of contractual penalties, provisions regarding supplementary compensation or termination of the main contract (termination of cooperation, negotiations).
2.8. Indication of exclusions from the confidentiality obligation
Finally, NDAs commonly feature clauses outlining situations in which a party is exempt from maintaining confidentiality, such as when obligated to provide information to a public administration body operating within the limits of the law and its authority. It is advisable to include provisions in the contract obligating the party to whom information is disclosed to inform the disclosing entity of such instances and ensuring the possibility of reaching an agreement with the other party regarding the extent of confidential information disclosed.