Are electronic signatures valid?

Yes. Electronic signatures are generally valid under the federal ESIGN Act (15 U.S.C. §7001) and state UETA statutes where adopted; New York follows its ESRA framework. Ensure intent, consent, attribution, and retention to satisfy legal tests.

When is notarization required?

Most Non-Use Agreements do not require notarization. Notarization may be needed when filing or when a state-specific formal instrument is involved; verify with local counsel for peculiar state forms.

What authentication level is needed?

Match authentication to risk: email-only for low risk, SMS or KBA for higher-risk IP assets. For regulated data, require stronger verification and consider retaining audit logs for defense.

How to fix a signing error?

If a signature or signer name is incorrect, prepare an amendment or re-execution page signed by all parties documenting the corrected information and execution date.

Can the agreement be rescinded?

Yes, parties can rescind by mutual written agreement. Unilateral revocation is subject to contract terms and may expose the revoking party to liability for breach.

How long should records be kept?

Retain executed agreements for the term plus a conservative post-term period—commonly 3–7 years; HIPAA and tax matters may require longer retention under federal rules.

Electronic Signature
Templates
Legal
Legal Non-Use Agreement

Legal Non-Use Agreement

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LEGAL NON-USE AGREEMENT

This Legal Non-Use Agreement ("Agreement") is made and entered into as of by and between Owner Name: (hereinafter "Owner") and Recipient Name: (hereinafter "Recipient"). Owner and Recipient may be referred to individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, Owner is the lawful owner of certain Proprietary Materials and information described as: (the "Subject Materials"); and

WHEREAS, Owner desires to prevent any use, exploitation, publication, or commercial deployment of the Subject Materials by Recipient except as expressly permitted in this Agreement; and

WHEREAS, Recipient acknowledges that unauthorized use of the Subject Materials would cause irreparable harm to Owner and agrees to be bound by the non-use obligations set forth below.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration, the receipt and adequacy of which are acknowledged, the Parties agree as follows:

1. DEFINITIONS

1.1 "Proprietary Materials" means all tangible and intangible materials, whether in written, electronic, graphic or other form, provided by Owner to Recipient and identified as Subject Materials in this Agreement, including but not limited to technical designs, inventions, specifications, trade secrets, business plans, and proprietary processes.

1.2 "Non-Use Period" means the period specified in Section 5 during which Recipient shall not use the Proprietary Materials except as expressly permitted by Owner in writing.

2. NON-USE OBLIGATION

2.1 Covenant. Recipient covenants and agrees that, except as expressly authorized in writing by Owner, Recipient shall not directly or indirectly use, reproduce, copy, distribute, display, create derivative works from, manufacture, commercialize, or otherwise exploit the Proprietary Materials in any form or medium.

2.2 No Reverse Engineering. Recipient shall not reverse engineer, decompile, disassemble, or attempt to derive the source, structure, or underlying ideas or algorithms of any Proprietary Materials.

3. SCOPE AND LIMITATIONS

3.1 Scope. The obligations of non-use described in Section 2 apply to all Proprietary Materials regardless of the manner in which they are transmitted and shall extend to Recipient's employees, agents, contractors, and affiliates who receive access to the Proprietary Materials.

3.2 Authorized Use. Any limited permitted uses must be set forth in a separate written instrument signed by Owner which specifically identifies the Proprietary Materials and the scope of permitted use.

4. EXCEPTIONS

4.1 General Exceptions. The obligations in this Agreement shall not apply to Proprietary Materials that Recipient can demonstrate by competent written evidence: (a) were in the public domain prior to disclosure by Owner; (b) are or become publicly available through no breach of this Agreement by Recipient; or (c) were rightfully in Recipient's possession prior to receipt from Owner.

4.2 Burden of Proof. The burden of proving any exception set forth in this Section 4 shall rest with Recipient.

5. TERM AND TERMINATION

The Non-Use Period shall commence on the Effective Date and shall continue for a period of years unless earlier terminated by written agreement of the Parties. The obligations of non-use with respect to Proprietary Materials that constitute trade secrets shall survive termination for as long as such materials remain trade secrets under applicable law.

6. REMEDIES; INJUNCTIVE RELIEF

6.1 Remedies. Recipient acknowledges that damages at law may be insufficient to protect Owner and that Owner shall be entitled to seek injunctive and other equitable relief to prevent or remedy breaches or threatened breaches of this Agreement, in addition to any other remedies available at law or in equity.

6.2 Specific Performance. The Parties agree that a material breach of the non-use covenants will cause irreparable harm to Owner for which monetary damages would be inadequate and that Owner may obtain specific performance without posting a bond.

7. INDEMNIFICATION

Recipient shall indemnify, defend and hold harmless Owner from and against any and all claims, liabilities, losses, damages, costs and expenses, including reasonable attorneys' fees, arising out of or related to Recipient's breach of this Agreement or unauthorized use of the Proprietary Materials.

8. CONFIDENTIALITY

Recipient agrees to treat Proprietary Materials as Confidential Information and to use at least the same degree of care to protect such Proprietary Materials as it uses to protect its own confidential information, but in no event less than a reasonable degree of care.

9. NOTICES

Owner Notice Address:

Recipient Notice Address:

All notices required or permitted under this Agreement shall be in writing and delivered to the addresses set forth above by hand delivery, nationally recognized overnight courier, or certified mail, return receipt requested, and shall be deemed given upon receipt.

10. AMENDMENT; WAIVER; COUNTERPARTS

10.1 Amendment. This Agreement may be amended or modified only by a written instrument executed by both Parties.

10.2 Waiver. No failure or delay by a Party in exercising any right under this Agreement shall operate as a waiver of that right.

10.3 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

11. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

11.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to conflicts of law principles.

11.2 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written.

11.3 Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not be affected thereby.

12. MISCELLANEOUS PROVISIONS

12.1 Assignment. Neither Party may assign this Agreement or any rights hereunder without the prior written consent of the other Party, except that Owner may assign this Agreement in connection with a merger, sale of substantially all assets, or similar transaction.

12.2 Relationship of Parties. The Parties are independent contractors and nothing in this Agreement shall create an employer-employee, partnership, joint venture, or agency relationship between them.

OWNER AND RECIPIENT IDENTIFICATION

Owner Entity Type:

Individual Corporation Limited Liability Company

Recipient Entity Type:

Individual Corporation Limited Liability Company

ADDITIONAL DETAILS

Purpose for which Proprietary Materials were disclosed (if any): Additional restrictions, carve-outs, or special instructions:

Owner (Print Name):

By (Signature):

Date:

Recipient (Print Name):

By (Signature):

Date:

What a Legal Non-Use Agreement Is and Where It Applies

A Legal Non-Use Agreement is a contract in which one party agrees not to use specific information, intellectual property, trade secrets, or other materials except as expressly authorized. Commonly bundled with confidentiality provisions or licensing terms, these agreements define permitted uses, duration, geographic limits, and remedies for misuse. They appear in employment exits, technology transfers, settlement terms, and licensing deals. When written with clear definitions, consideration, signatures, and scope, they create enforceable contractual obligations under state contract law and applicable electronic signature statutes.

Why parties rely on a Legal Non-Use Agreement

A Non-Use Agreement narrows how sensitive materials may be exploited, reducing litigation risk and clarifying remedies. It preserves value in IP, enables commercial sharing, and documents the parties' expectations for future enforcement and dispute resolution.

Who typically prepares or signs a Legal Non-Use Agreement

Typical parties who prepare or sign Legal Non-Use Agreements include employers, licensors, licensees, and parties to settlements or M&A transactions.

Real estate and property managers who restrict use of appraisal, tenant, or listing data in transactions.
Healthcare providers and vendors who limit use of sensitive clinical or patient-related operational data.
Corporate counsel and contracting teams negotiating licenses, settlements, or employment separation agreements.

Confirm signer authority and decision-maker involvement before execution to avoid later challenges to enforceability and attribution.

Core provisions to include in a professional Legal Non-Use Agreement

A well-drafted Non-Use Agreement contains clear definitions, scope limits, duration, remedies, and signing mechanics so courts or arbitrators can apply the parties' intent without ambiguity.

Definitions

Define confidential materials, data categories, and any technical terms precisely so the scope of non-use is enforceable and not subject to competing interpretations.

Scope

State exactly what uses are prohibited and what activities remain permitted, including permitted recipients, permitted analyses, and any carve-outs for preexisting rights.

Consideration

Record the consideration supporting the restriction—monetary payment, access rights, settlement terms, or other bargained-for exchange required for contract validity.

Duration

Specify the start and end dates of non-use obligations, any survival clauses, and conditions that trigger early termination or renewal of restrictions.

Remedies

Identify injunctive relief, monetary damages, liquidated damages (if appropriate), and allocation of attorneys' fees for breach and enforcement.

Audit & Compliance

Include rights to verify compliance, permitted audit procedures, notice and cure periods, and procedures for secure return or destruction of materials.

Step-by-step: completing a Legal Non-Use Agreement

Follow these core steps to prepare, review, and finalize a Non-Use Agreement for enforceability.

01

Draft: Define materials, uses, and term precisely.
02

Review: Legal counsel checks enforceability and conflicts.
03

Sign: Obtain signatures and record dates.
04

Record: Retain executed copies in secure storage.

How the Non-Use Agreement process typically flows

A predictable process reduces negotiation friction and helps teams complete agreements efficiently.

Request: Initiate with a draft and defined exhibits.
Negotiate: Exchange redlines and clarify carve-outs.
Execute: Sign electronically or on paper with authority.
Enforce: Monitor compliance and apply remedies if breached.

Typical digital workflow settings for executing the agreement

Configure signing workflow fields and authentication to match risk and regulatory needs.

Field	Configuration
Signature Type	Electronic signature with audit trail
Authentication	Email link or SMS code; KBA for higher risk
Execution Order	Sequential for authorizing signers
Retention	Automatic archive and export PDF/A

Digital signing and platform requirements

Choose a platform that supports secure e-signatures, audit trails, and the authentication level your agreement requires.

Integrations: Salesforce, NetSuite, Microsoft 365
Security: AES-256 at rest
Compliance: ESIGN, UETA, SOC 2

Sample eSignature vendor comparison for executing Non-Use Agreements

The table compares common plan-level attributes for electronic execution and compliance support. signNow is listed first per vendor comparison conventions.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes	Yes	Yes	Yes	Varies
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Common legal risks and potential penalties

Contract void risk: Ambiguous scope

Breach damages: Compensatory awards

Injunction relief: Court-ordered restraints

Attorney fees: Possible recovery clause

Regulatory exposure: Industry compliance fines

Tax penalties: See IRC §6721 for reporting penalties

Frequent drafting and execution mistakes to avoid

Overbroad prohibitions that prevent legitimate business operations and may render the restriction unenforceable by courts.
Vague definitions that fail to describe the restricted materials or permitted uses, leading to disputes about scope and intent.
Missing or inadequate consideration language for standalone restrictions, which can threaten contract formation in some jurisdictions.
Insufficient signing authority or unsigned execution pages that create ambiguity about who agreed and when obligations began.

Practical drafting and completion tips

Follow these best practices to increase enforceability and streamline execution.

Use precise definitions

Define the restricted materials with examples and, where helpful, attach a schedule. Precision reduces interpretation disputes and limits the chance that a court will sever or void broad language.

Limit duration reasonably

Select a duration tied to business need; excessively long terms increase the likelihood of a court finding the restriction unreasonable and therefore unenforceable.

Document consideration

Record specific consideration—payment, license grant, or settlement concessions—to support contract formation and help counter challenges to enforceability.

Choose authentication level

Match signer authentication to risk: basic email for low risk, SMS/KBA or stronger methods for high-value IP matters and regulated industries.

Real examples showing how Non-Use Agreements are used

Short examples illustrate practical application across different organizations and use cases.

Optica Ventures LLC

Optica needed simple customer-facing execution for investor documents and IP protections.

The interface had to be easy for external parties.
Brian Fitzgibbons, COO, described the platform as simple to use for their team and customers while supporting required compliance and signature capture.

Tech Data

A large distributor centralized authorizations and vendor restrictions across business units.

Integration with internal systems was essential.
Bob Dutkowsky, CEO at Tech Data, reported faster internal and external service while improving speed to revenue via streamlined signing workflows.

Key dates and deadlines to track in a Non-Use Agreement

Track execution, effectiveness, notice windows, and retention dates to ensure obligations are clear and enforceable.

Execution Date:

Date the last party signs; triggers obligations

Effective Date:

When restrictions legally commence

Restriction Term:

Duration specified in agreement terms

Notice and Cure:

Period provided before enforcement action

Record Retention:

Retention schedule per corporate policy and law

Common questions and practical answers about Non-Use Agreements

Answers below address signature validity, enforceability, and common execution problems for U.S. transactions.

Need help? Contact support

Are electronic signatures valid?
Yes. Electronic signatures are generally valid under the federal ESIGN Act (15 U.S.C. §7001) and state UETA statutes where adopted; New York follows its ESRA framework. Ensure intent, consent, attribution, and retention to satisfy legal tests.
When is notarization required?
Most Non-Use Agreements do not require notarization. Notarization may be needed when filing or when a state-specific formal instrument is involved; verify with local counsel for peculiar state forms.
What authentication level is needed?
Match authentication to risk: email-only for low risk, SMS or KBA for higher-risk IP assets. For regulated data, require stronger verification and consider retaining audit logs for defense.
How to fix a signing error?
If a signature or signer name is incorrect, prepare an amendment or re-execution page signed by all parties documenting the corrected information and execution date.
Can the agreement be rescinded?
Yes, parties can rescind by mutual written agreement. Unilateral revocation is subject to contract terms and may expose the revoking party to liability for breach.
How long should records be kept?
Retain executed agreements for the term plus a conservative post-term period—commonly 3–7 years; HIPAA and tax matters may require longer retention under federal rules.

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