nda -- legal guide: non-disclosure & confidentiality agreement (employees or independent...

Legal Guide:Non-Disclosure &Confidentiality Agreement:(for use with Employees orIndependent Contractors)

A Beginners Step-by-Step Guide forBusiness Owners, Beginners, andNon-Lawyers

Updated: March 18, 2010

NOTICE TO READER: The information in this article is a brief summary forinformational purposes only. It is not meant to be legal advice. If yourequire information or advice as it relates to your individual circumstancesyou are advised to consult with a lawyer.

Download Legal Forms:• USA: Confidentiality / Non-Disclosure Agreement• Canada: Confidentiality / Non-Disclosure Agreement

http://www.lawdepot.com/contracts/confidentiality-agreement/?pid=pg-JNYJBI64B4-generaltextlink&loc=CA

http://www.lawdepot.com/contracts/confidentiality-agreement/?pid=pg-JNYJBI64B4-generaltextlink&loc=US

Legal Guide: NDA / Confidentiality Agreement for use in: of 10Employee or ContractorDownload: USA: NDA form Canada: NDA form

NOTICE TO READER: The information in this article is a brief summary forinformational purposes only. It is not meant to be legal advice. If you require informationor advice as it relates to your individual circumstances you are advised to consult with alawyer. E.&O.E. ©2010 CanadaLegal.com / Cusimano.Com Corporation

Table of Contents1. Introduction2. When is an NDA / Confidentiality

Agreement Used3. Basics of an NDA / Confidentiality Agreement4. Prepare an NDA / Confidentiality Agreement Now5. Next Steps6. Useful Resources Online

1. Introduction

In business matters, it is often necessary that your employees or third partycontractors will have or will require access to information about yourbusiness in order to provide service to your company. For example, it is notuncommon for certain employees to have access to customer lists, supplierinformation, or financial information. However, you may be reluctant todisclose the information without some form of written agreement to protectthe legal rights of the disclosing party.

The legal document used to protect your legal rights is a called a“Non-Disclosure Agreement” (also known simply as an “NDA”) or a“Confidentiality Agreement”. All these titles refer essentially to the sametype of document.

2. When Is an NDA / Confidentiality Agreement Used?

An NDA / Confidentiality Agreement is useful under any situation whereyou will need to disclose information to employees or contractors that youconsider as confidential.

Download Legal Forms:• USA: NDA form• Canada: NDA form


http://www.lawdepot.com/contracts/confidentiality-agreement/?pid=pg-JNYJBI64B4-generaltextlink&loc=UShttp://www.lawdepot.com/contracts/confidentiality-agreement/?pid=pg-JNYJBI64B4-generaltextlink&loc=US







When hiring employees or an independent third party contractor you maywant some legal protection to ensure that the employee/contractor agreesto keep certain information about your business confidential such as:

(a) client contact information

(b) methods of doing business

(c) other employee information

(d) supplier information

(e) financial information about the business

(f) discussions of future business plans or discussions with third parties

3. Basics of an NDA / Confidentiality Agreement

An NDA / Confidentiality Agreement usually contains provisions with thefollowing basic elements:

1. Name of the parties

2. Date of the Agreement and the time period for the confidentiality

3. Obligation of recipient not to disclose the confidential information

4. Definition or description of what will be considered as “confidential”(e.g.: client list, or product, or potential business relationship)

5. Exceptions for certain information that is not considered confidential(e.g.: information that is already in the public domain and easilyobtainable is generally not considered to be confidential)

6. Legal rights and remedies available to the disclosing party in theevent that the recipient party discloses Confidential Information (e.g.:







the disclosing party will have the right to obtain a court order to stopthe recipient party from disclosing the information).

7. General legal provisions

4. Prepare an NDA / Confidentiality Agreement Now

You can easily prepare an NDA / Confidentiality by filling in an online form.Click one of the following links then follow the instructions below whenfilling out the online form:

• USA: NDA form• Canada: NDA form

Section inonline form: Subsection Additional Notes:

Governing Law Generally, State / Province selected isthe where the disclosing party islocated

Choose formof agreement

You can choose “ConfidentialityAgreement” or “Non-DisclosureAgreement”. Practically, there is nodifference between the two. Choosethe label that you feel mostcomfortable using.

Form ofAgreement

Type ofAgreement:

You have several options to choosefrom. Select:3. Employee / IndependentContractor. Use this option if you arehiring an employee or retaining theservices of a 3rd party contractor toprovide you with services.









For example, you may be hiring a computer programmer who will becreating a database of your customer list, or a computer consultant who willhave the passwords to your email accounts.


Employer PersonProvidingConfidentialInformation

Enter the name of each partyproviding or disclosing confidentialinformation – usually this is the“employer” or the company that ishiring the independent contractor /consultant / third party.It is important to enter in the fullproper legal name of the party and tomake sure that the name is spelledproperly without spelling errors.(a) For an individual: referenceshould be made to a legal documentsuch as a birth certificate, passport,driver’s license, or other governmentissue identification. The name on acredit card is usually not sufficient. Ifthe person usually multiple names,you may wish to enter the name in aformat as follows:“Bill Smith also known as WilliamSmith”(b) For a corporation: referenceshould be made to the corporation’sofficial incorporation certificate toobtain to proper full legal name of thecorporation.








Be sure to enter the address of thedisclosing party. Try to avoid using aPost Office box. An actual address ispreferable. If an individual is reluctantto use their residential address, usetheir business address instead.Specify the type (individual orcorporation) and for individual, alsoenter the gender.

Employee /Contractor

PersonReceivingConfidentialInformation

Enter the name of theperson/company who will be receivingconfidential information.If you are contracting with anindividual, enter the individual’s nameand information. If you are contractingwith a corporation, enter thecorporation’s name.It is important to enter in the fullproper legal name of the party and tomake sure that the name is spelledproperly without spelling errors.(a) For an individual: referenceshould be made to a legal documentsuch as a birth certificate, passport,driver’s license, or other governmentissue identification. The name on acredit card is usually not sufficient. Ifthe person usually multiple names,you may wish to enter the name in aformat as follows:“Bill Smith also known as William








Smith”(b) For a corporation: referenceshould be made to the corporation’sofficial incorporation certificate toobtain to proper full legal name of thecorporation.Be sure to enter the address of thereceiving party. Try to avoid using aPost Office box. An actual address ispreferable. If an individual is reluctantto use their residential address, usetheir business address instead.Specify the type (individual orcorporation) and for individual, alsoenter the gender.

Employee orContractor

Independent Contractor: select thisoption if the party that the disclosingparty has contracted with is acompany or organizationEmployee: select this option if theparty that the disclosing party hascontracted with is an individual person

Job Title /Description:

Enter a description that describesreceiving party’s role. For example,Consultant, analyst, web designer,programmer, marketer, salesperson

Contractorwill use orcreate

Unless the nature of the services theperson/company will be providingdoes not involve the use of any








computertechnology?

computer technology then you shouldselect “yes” for this option.

Duty ofConfidentiality

preventedfromcompeting for

Since a recipient will be receivingconfidential information, the Employermay want to prevent the recipientfrom using the information to start acompeting business.The longer the period chosen, themore likely that the period will not beenforceable. As such, you need toselect a reasonable period dependingon the nature of you’re the person’sJob title/Description. Also, you cannotprevent someone from carrying ontheir profession so you need toconsider what is reasonable.This section should be completed ifthe person is being hired as anemployee. Select the lowest timeframe that is reasonably necessary toprotect the interests of the disclosingparty.Some contractors may not beagreeable to this provision, especiallyif they are providing services to othercustomers of theirs.

preventedfrom solicitingemployees for

Since a recipient will be receivingconfidential information about theemployees of the business, theEmployer may want to prevent the








recipient from using the information toapproach the employees to hire themitself.

Duties ofConfidentialitycontinue aftertermination

This section should be completed.Select the lowest time frame that isreasonably necessary to protect theinterests of the Employer. The longerthe period chosen, the more likely thatthe period will not be enforceable. Assuch, you need to select a reasonableperiod depending on the nature of thebusiness and the Job Title /Description.

Additional Clauses Duties ofConfidentialitycontinue aftertermination

If there are any special obligations,promises, or text you want inserted,use this section.For example, the parties may want toinclude a provision that specifies thatno information may be removed fromthe location of the Employer:“the Employee/IndependentContractor agrees that no confidentialinformation may be removed from theoffices of the Employer”.

Execution Date Signing date If you know the date the document willbe effective, select it from the options,otherwise select “unsure” and fill inthe date at the time it is signed.












witnessesrequired

Select “Yes” here, unless you have areason to dispense with a witness.In the event that a party to theagreement denies that they signedthe document, a witness can servethe purpose to testify that they in factthey were present and saw thedocument signed.A witness should be present and seethe party signing the document.If the parties are not signing thedocument at the same time or in thesame room, then separate witnessesshould be used for each party.

5. Next StepsOne you have completed the form, print out 2 copies and have 2 originalssigned and witnesses. One original should be kept in your records and theother original should be given to the other party.

6. Other Useful Resources OnlineDownloadable Legal Forms:

• Business Agreements: • USA • Canada• Employee Agreements: • USA • Canada• Consulting / Services Agreements: • USA • Canada

http://www.lawdepot.com/contracts/groups/business/?pid=pg-JNYJBI64B4-generaltextlink&loc=CA

http://www.lawdepot.com/contracts/groups/business/?pid=pg-JNYJBI64B4-generaltextlink&loc=US







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