Drafting Unilateral Non Disclosure Agreements

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

Drafting a unilateral non disclosure agreement (NDA) is a complex process that requires an in-depth understanding of both the law and the specifics of each situation. Such agreements are essential to protect confidential information from being disclosed to third parties, and are commonly used to safeguard trade secrets, intellectual property, and other sensitive data.

At its core, a unilateral NDA is designed to protect confidential information while making sure that all parties involved are aware of their legal rights and obligations. A comprehensive document should clearly delineate the scope of information deemed confidential, specify which parties are bound by it, clarify any restrictions on disclosure, lay out enforcement details and consequences for breaching said terms.

Unilateral NDAs play an integral role in business transactions when one party wants to keep certain information private; for example if a company has been negotiating with another firm about acquiring their product or services - they may request for them to sign an NDA so as to preserve confidentiality regarding customer lists or pricing details.

When creating such agreements it’s important that language be unambiguous and comprehensible for everyone involved; this will ensure legality is correctly upheld and prevent any misinterpretations from occurring. Additionally all stakeholders should be fully familiarised with the agreement including what repercussions may result from failing to adhere - providing further assurance that confidential data isn’t misused in any way shape or form.

The Genie AI team understand how important these agreements can be - that’s why we provide full access to our open source library of millions of datasheets teaching our AI what a market-standard unilateral NDA looks like allowing anyone who uses them the ability steer clear from costly lawyers’ fees while still controlling their own privacy rights. Plus using our guide doesn’t require any form of registration with us whatsoever - we simply want you to have all possible resources available at your disposal so you can stay safe no matter what! Read on below for step-by-step guidance on drafting your own documents today as well as additional info on how you can access our template library!

Definitions (feel free to skip)

Parties – People or entities involved in an agreement.
Scope – The range or area of something that is included.
Confidential Information – Information that is not supposed to be shared with others.
Trade Secrets – Information that is kept secret by a business to give it an advantage over competitors.
Intellectual Property – Creative works or ideas that are protected by copyright, trademark, or patent law.
Duration – The amount of time something lasts.
Remedies – Actions taken to fix a problem or compensate for a loss.
Breach – When someone does not follow or respect the terms of an agreement.
Governing Law – The laws that an agreement is subject to.
Jurisdiction – The area or country that a law applies to.
Executing – Signing and making an agreement legally binding.

Contents

• Identifying the parties involved in the agreement
• Examining the scope of confidential information to be protected
• Specifying the types of information to be protected
• Deciding who will have access to the information
• Deciding on the duration of the agreement
• Establishing the remedies for breach of the agreement
• Setting out the consequences for breach
• Addressing disputes or disagreements
• Ensuring compliance with applicable laws
• Identifying relevant legislation
• Determining any additional requirements
• Setting out the governing law and jurisdiction
• Drafting the agreement
• Outlining the terms and conditions
• Including the relevant clauses
• Signing and executing the agreement
• Obtaining the necessary signatures
• Finalizing the agreement
• Distributing copies of the agreement
• Storing the agreement securely
• Deciding on a secure storage method
• Establishing a backup system

Get started

Identifying the parties involved in the agreement

• Identify the parties involved in the agreement and ensure that they have the legal authority to enter into the agreement
• Confirm the legal names and contact information of the parties
• Specify the relationship between the parties, such as employee/employer or contractor/client
• Determine which party will be the “Disclosing Party” and which will be the “Receiving Party”
• Once all of the parties involved in the agreement have been identified, you can check this step off your list and move on to the next step.

Examining the scope of confidential information to be protected

• Review the purpose of the NDA and discuss with the other party to identify any confidential information that needs protection
• Determine what type of confidential information needs to be protected and how much information needs to be included
• Consider the scope of confidential information, including whether the NDA should cover confidential information created before or after the agreement
• Consider whether the NDA should include a clause that specifies that any future confidential information should be subject to the NDA

When you can check this off your list and move on to the next step:

• When the scope of the confidential information to be protected has been agreed by both parties.

Specifying the types of information to be protected

• Identify the types of information that need to be protected
• List out any trade secrets, proprietary information, and intellectual property related to the business
• Create a list of all the categories of information that need to be included in the NDA
• Take into account the scope of the disclosure and the needs of the business
• When the list of information to be protected is clear and concise, you may move on to the next step: Deciding who will have access to the information.

Deciding who will have access to the information

• Determine who needs access to the confidential information.
• Consider the type of access that each individual will have.
• Consider the number of people who will have access to the confidential information.
• Decide whether the agreement should include language that limits the disclosure of information to only those who need to know.
• Decide whether the agreement should include language that limits the disclosure of information to only those who are bound by the agreement.

Once you have determined who will have access to the confidential information, you can move on to the next step of deciding on the duration of the agreement.

Deciding on the duration of the agreement

• Consider how much time is needed to protect the information in the agreement
• Determine how long is necessary for the parties to benefit from the agreement
• Consider the laws of the jurisdiction in which the agreement is being used
• Determine the period of time that is reasonable and necessary
• Include a term that states when the agreement will expire
• Check to see if any state laws require a specific duration for the agreement

Once you have considered all these factors and determined the duration of the agreement, you can check this off your list and move on to the next step: Establishing the remedies for breach of the agreement.

Establishing the remedies for breach of the agreement

• Determine the type of remedies that should be included in the agreement
• Consider what type of financial damages should be awarded in the event of a breach
• Decide if the agreement should provide for injunctive relief or specific performance
• Establish what the non-breaching party has the right to do in the event of a breach
• Clearly specify the remedies in the agreement
• Once you have established the remedies for breach of the agreement, you can move on to the next step, setting out the consequences for breach.

Setting out the consequences for breach

• Establish what is considered a breach of the agreement, such as disclosing confidential information, failing to comply with a confidentiality obligation, or using the confidential information for any purpose other than the agreed-upon one
• Set out the consequences for a breach of the agreement, such as a termination of the agreement, a financial penalty, or a request for an apology
• Make sure the consequences are legally enforceable and reasonable
• Once the consequences have been set out, the step can be marked as complete.

Addressing disputes or disagreements

• Research the applicable laws in both parties’ respective jurisdictions to ensure that any agreed-upon dispute resolution method is compliant.
• Include a clause on dispute resolution which outlines the method of addressing any disagreements or disputes that may arise out of the NDA. This can include arbitration, mediation, or litigation.
• Ensure that this clause is clearly written and easy to understand, so that both parties are aware of their obligations and rights.
• When you feel confident that the dispute resolution clause is compliant and clearly drafted, you can check this part of the NDA off your list and move on to the next step.

Ensuring compliance with applicable laws

• Research applicable laws in the jurisdiction where the agreement will be enforced
• Make sure the agreement includes any mandatory provisions required by the applicable laws
• Ensure that any provisions contradicting the applicable laws are removed
• When all the applicable laws have been taken into account, the agreement will be compliant with those laws and the step can be checked off the list.

Identifying relevant legislation

• Research the applicable laws of the relevant jurisdictions
• Research any industry specific regulations that may impact the agreement
• Consider the applicable statutory and common law requirements
• Obtain advice from an expert in the applicable laws
• Check when the laws and regulations have been last updated
• When you have identified the relevant legislation, you can check this off your list and move on to the next step.

Determining any additional requirements

• Identify any additional requirements that must be included in the NDA in order to protect the disclosing party
• Consider the purpose of the NDA, the type of information being disclosed, the parties involved, and any other circumstances that may require custom provisions
• Draft any additional provisions, if necessary, to ensure any special circumstances or requirements are met or addressed
• Once you have determined there are no additional requirements, you can move on to setting out the governing law and jurisdiction for the NDA.

Setting out the governing law and jurisdiction

• Select a governing law and jurisdiction for the agreement. This should be a country or state that both parties are comfortable with and that has laws that are conducive to the type of agreement they are signing.
• If one party is located in a different jurisdiction than the other, it may be advisable to select the governing law of the party located in the jurisdiction with the most relevant laws.
• If either party is located outside of the US, it may be beneficial to select a governing law that is familiar to both parties or that is widely accepted in international agreements.
• Add a clause to the agreement that sets out the governing law and jurisdiction.
• Once the law and jurisdiction have been selected and the clause has been added to the agreement, the step is complete and you can move on to drafting the agreement.

Drafting the agreement

• Carefully read the governing law and jurisdiction set out in the previous step to ensure your agreement is legally compliant
• Outline the parties to the agreement, including their respective contacts, addresses and roles
• Describe the confidential information that is to be disclosed and by whom
• Include a clause that ensures the maintenance of confidentiality
• Draft a clause that allows for the return of confidential information
• Outline any other restrictions or limitations on the use of the confidential information
• Identify the duration of the agreement
• Specify the remedies or sanctions for breach of the agreement
• Include a clause that governs the modification or termination of the agreement

When you have completed all of these steps, you can move on to the next step: Outlining the terms and conditions.

Outlining the terms and conditions

• Identify and document the purpose of the agreement
• Research and document the applicable laws that may affect the agreement
• Identify what information needs to be protected
• Determine the parties who need access to the confidential information
• Establish the duration of the agreement
• Determine what is considered confidential information
• Establish the rights of the disclosing party
• Establish the obligations of the receiving party
• Establish the remedies for breach of confidentiality
• Establish the law governing the agreement
• Establish the jurisdiction of the agreement

You can check this step off your list when all the above points have been addressed and documented accordingly.

Including the relevant clauses

• Draft a clause that defines the scope of the information to be protected (e.g. proprietary information, trade secrets, etc.)
• Draft a clause that outlines the obligations of the receiving party (e.g. confidentiality, non-disclosure, non-use, etc.)
• Draft a clause that outlines any exceptions to the agreement, if applicable
• Draft a clause that outlines the duration of the agreement
• Draft a clause that outlines the remedies of the disclosing party in the case of breach of the agreement
• Draft a clause that outlines the termination of the agreement
• Review the agreement and make sure all relevant clauses have been included
• Once all clauses have been included, you can check this off your list and move on to signing and executing the agreement.

Signing and executing the agreement

• Have both parties present to sign the agreement
• Ensure all documents are signed by the required parties
• Check that all signatures are dated
• Make sure all parties have copies of the executed agreement
• Once all parties have signed, the NDA is in effect
• You can check off this step when all parties have signed the agreement and have copies of the executed NDA.

Obtaining the necessary signatures

• Obtain signature of the disclosing party.
• Obtain signature of the receiving party.
• When both signatures are obtained, the agreement will be considered executed and you can move on to the next step.

Finalizing the agreement

• Review the agreement and ensure that all the necessary signatures are obtained from the parties involved
• Make sure that all the information provided by the parties is accurate and up-to-date
• Ensure that the agreement is drafted according to the laws and regulations of the jurisdiction in which it is being used
• Format the agreement in a way that is easily readable and understandable
• Make copies of the agreement for each party involved
• Ensure that each party has a copy of the agreement and understands the terms and conditions

You will know that you can check this off your list and move on to the next step when the agreement is reviewed and all the necessary signatures are obtained and each party has a copy of the agreement.

Distributing copies of the agreement

• Create a secure file-sharing system to send the agreement to all parties.
• Email the agreement to each of the parties involved.
• Ensure that all parties have acknowledged receipt of the agreement, either through email or physical signature.
• When all parties have acknowledged receipt of the agreement, you can check this step off your list and move on to the next step.

Storing the agreement securely

• Backup a copy of the agreement for your records
• Store the agreement in a secure, private location
• Ensure that the agreement is only accessible to authorized personnel
• When you have completed the above steps, you can move on to the next step of deciding on a secure storage method.

Deciding on a secure storage method

• Decide on a secure storage method such as a password-protected online document store
• Consider encrypting the document for additional security
• Check to ensure that the storage method is easily accessible, so that both parties can access the document as needed
• Once the storage method is established, you can check this off your list and move on to establishing a backup system.

Establishing a backup system

• Decide if you need an on-site or cloud-based backup system
• Research backup solutions that fit your needs and budget
• Securely store backups in a location away from the original
• Test backups periodically to ensure that they are working properly
• Archive older backups to free up storage space
• When you are satisfied with the backup system, check this off the list and move on to the next step.

FAQ:

Q: What are the differences between UK and US laws when it comes to drafting a Unilateral Non Disclosure Agreement?

Asked by Toby on 3rd April 2022
A: The laws regarding Unilateral Non Disclosure Agreements (NDAs) vary from country to country so it’s important to be aware of the differences between the UK, US and EU jurisdictions. In the UK, NDAs are generally governed by contract law and parties are expected to comply with the terms of the agreement. In the US, NDAs are more commonly known as Confidentiality Agreements and are typically enforced through trade secrets law. EU law is slightly different as it requires both parties to enter into a contract in order for an NDA to be legally binding.

It’s also important to note that each jurisdiction has its own specific rules and regulations when it comes to drafting NDAs, such as when a disclosure is considered confidential, the duration of the agreement and other details relating to the agreement. For example, in the US, certain disclosures may not be protected by an NDA if they are deemed to be ‘publicly available information’.

Q: How should I go about drafting a Unilateral Non Disclosure Agreement for my B2B business?

Asked by Julie on 28th May 2022
A: When drafting a Unilateral Non Disclosure Agreement (NDA) for a B2B business, there are several key elements that must be taken into account. Firstly, you need to determine what information needs to be kept confidential and who will have access to it. This will help you decide what type of NDA should be used – either one-way or mutual – and any necessary clauses that need to be included in the agreement.

You should also consider any restrictions on use of confidential information, such as how long the confidentiality period should last, who can access it and what information can be shared with third parties. It’s also important to include provisions about non-disclosure obligations for any third parties who may become involved in the agreement. Lastly, you should ensure that any sensitive information is adequately protected with appropriate security measures.

Q: What should I consider when drafting a Unilateral Non Disclosure Agreement for a SaaS company?

Asked by Ryan on 15th June 2022
A: When drafting a Unilateral Non Disclosure Agreement (NDA) for a SaaS company, there are several key considerations that must be taken into account. Firstly, you must decide which type of NDA is appropriate – one-way or mutual – depending on your specific needs and objectives. You should also consider any restrictions on use of confidential information such as what can and cannot be disclosed, how long the confidentiality period should last, who can access it and what information can be shared with third parties.

It’s also important to include provisions about non-disclosure obligations for any third parties who may become involved in the agreement. Lastly, you should ensure that any sensitive information is adequately protected with appropriate security measures such as encryption and secure storage systems.

Q: What is the difference between a one-way and mutual Unilateral Non Disclosure Agreement?

Asked by Marc on 15th July 2022
A: A one-way Unilateral Non Disclosure Agreement (NDA) is drafted between two parties where only one party discloses confidential information while the other party agrees not to disclose this information or use it for their own benefit. This type of NDA is usually used in situations where one party needs access to confidential information without disclosing their own confidential information in return.

A mutual NDA is drafted between two parties where both parties exchange confidential information and agree not to disclose this information or use it for their own benefit. This type of NDA is often used when two parties need access to each other’s confidential information in order to move forward with a business transaction or venture.

Example dispute

Suing a Company for Breach of Unilateral Non Disclosure Agreement:

• A plaintiff could raise a lawsuit against a company for breach of a unilateral non disclosure agreement (NDA) if the company failed to keep the confidential information shared under the agreement confidential.
• The plaintiff must be able to prove that the NDA was valid and that it was breached.
• The plaintiff may try to prove that the company disclosed confidential information, or failed to protect it adequately.
• The plaintiff can also demonstrate that they suffered damages due to the breach, such as lost profits or reputation damage.
• The plaintiff may also be entitled to specific performance, meaning the company would have to take steps to protect the confidential information again.
• The court may also award compensatory damages to the plaintiff if they can prove that the breach caused them financial loss.
• If the court finds that the breach was willful or intentional, then punitive damages may also be awarded.
• The court may also order the defendant to pay the plaintiff’s legal fees.

Templates available (free to use)

Unilateral Non Disclosure Agreement

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