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Nondisclosure Agreement

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NONDISCLOSURE AGREEMENT

THIS AGREEMENT is made by and between , (“Company” or “First Party”), and ("Second Party"), effective as of the date set forth below.

WITNESSETH: The parties hereto, intending to be hereby legally bound, agree as follows:

1. General. Second Party has requested or may be receiving from the Company information of a non-public nature in connection with dealings, contract or employment with the Company. As used herein “First Party”, “Second Party” and “Company”, includes each of their officers, directors, agents, employees and representatives and heirs, including financial and legal advisors (collectively, "Representatives").

2. Confidential Information Defined. The parties acknowledge that, in the course of the development, operation, employment and analysis of the Company, the Second Party may receive certain confidential information from or about the Company and its affiliates, officers, owners and directors, as the case may be, including but not limited to finances, marketing, target markets, suppliers, technical, financial and business information and models, names of potential customers, proposed business transactions with third parties, reports, plans, market projects, software programs, data and other confidential and proprietary information relating to the Company or its business whether provided orally or in writing. All such technical, financial or other business information, as described, thus supplied by the Company, or learned by Second Party, or its Representatives is hereinafter called the "Information".

3. Exclusions from Definition. The term "Information" as used herein does not include any data or information which is already known to the Second Party at the time it is disclosed to the Second Party, or which before being divulged to the Second Party (a) has become generally known to the public through no wrongful act of the Second Party; (b) has been rightfully received by the Second Party from a third party without restriction on disclosure; or (c) has been disclosed pursuant to a requirement of a governmental agency or of law without similar restrictions or other protection against public disclosure, or is required to be disclosed by operation by law.

4. Nondisclosure Obligation. Second Party, as well as its Representations receiving any Information shall keep such Information confidential and shall not disclose such Information, in whole or in part, to any person other than its Representatives who need to know such Information in connection with the Second Parties involvement with the Company (it being agreed and understood that such Representatives shall be informed by Second Party of the confidential nature of the Information and shall be required by Second Party to agree to treat the Information confidentially).

5. Standard of Protection. For the purpose of complying with the obligations set forth herein, the Second Party shall use efforts commensurate with those that such party employs for protection of corresponding sensitive information of its own. However, in the event that the Second Party receiving any Information is legally required to disclose any Information, Second Party shall promptly notify the Company of such request or requirement prior to disclosure so that the Company may seek an appropriate protective order and/or waive compliance with terms of this Agreement.

6. Nonuse Obligation. In addition to its obligation of nondisclosure hereunder, Second Party agrees that it will not, directly or indirectly, attempt to appropriate or otherwise take for its or other parties' benefit the business opportunity of the Company as it relates to the business of the Company.

7. Ownership; Return of Information. All Information (including tangible copies and computerized or electronic versions thereof) shall remain the property of the Company. Within ten (10) days following the receipt of a written request from the Company, Second Party will either deliver to the Company or destroy all tangible materials contain or embodying the Information received from the Company and the Second Party shall deliver to the Company a certificate certifying that all such materials in the Company's possession have been delivered or destroyed.

8. No Representations or Further Obligations. Neither this Agreement nor the disclosure or receipt of Information shall constitute or imply any promise or intention to undertake any specific action on behalf of the Company. It is understood that this Agreement does not obligate either party to enter into any further agreements or to proceed with any possible relationship or other transaction.

9. Applicability to Representatives and Affiliates. The obligations of the Second Party hereunder of nondisclosure and nonuse shall extend to its affiliates and Representatives.

10. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of .

IN WITNESS WHEREOF, the parties have executed and delivered this Nondisclosure Agreement effective as of the date of execution by the last party to execute this Agreement as set forth below.

Effective Date:

Company

Signature

Second Party

Signature

Company Printed Name

Second Party Printed Name

Company Title

Second Party Title

Company Date

Second Party Date

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What a Nondisclosure Agreement Is and when it matters

A Nondisclosure Agreement (Nondisclosure Agreement or NDA) is a contract that creates enforceable obligations to keep specified information confidential. NDAs define the parties, types of confidential information, permitted uses, exclusions, term, and remedies for breach. In the United States, properly executed electronic NDAs are generally enforceable under the ESIGN Act (15 U.S.C. ch. 96) and state UETA laws, subject to statutory exceptions and contract fundamentals such as mutual assent, consideration, and clear scope of confidentiality.

Why using a formal Nondisclosure Agreement helps protect your business

A written Nondisclosure Agreement clarifies what information is protected, limits use and disclosure, and creates contractual remedies for unauthorized sharing; it reduces ambiguity in collaborations and supports enforcement in court.

Why using a formal Nondisclosure Agreement helps protect your business

Core elements to include in a professional Nondisclosure Agreement

A clear, well-structured Nondisclosure Agreement reduces enforcement risk and improves operational compliance. The following six elements form the backbone of most NDAs and should be tailored to the transaction, jurisdiction, and industry needs.

Parties

Identify full legal names and business entities for the disclosing and receiving parties, including any affiliates covered by the agreement, to avoid ambiguity in enforcement.

Definition of Confidential Information

Specify categories and examples of protected information and whether information is protected by marking, oral disclosure followed by written memo, or by trade-secret status.

Permitted Uses

State precisely how the receiving party may use the information (for evaluation, limited project work, etc.) and prohibit reverse engineering and unauthorized dissemination.

Exclusions

List standard exclusions such as publicly available information, independently developed information, or information lawfully obtained from third parties without breach of duty.

Term and Return Obligations

Define the confidentiality period, obligations to return or destroy materials at termination, and record-keeping obligations for retained copies and backups.

Remedies and Governing Law

Include injunctive relief, damages, and the chosen governing state law and venue; specify attorneys' fees and dispute resolution if desired.

Step-by-step: completing and executing the NDA

Use a consistent process to reduce errors: prepare the form, confirm parties, set the scope, and execute with appropriate authentication and record retention.

  • 01
    Prepare document: Populate parties, definitions, and term with precise language.
  • 02
    Review authority: Confirm signer authority and corporate signatory rules in advance.
  • 03
    Choose execution method: Decide on in-person, RON, or eSignature and record consent to electronic records if required.
  • 04
    Retain audit records: Keep signed PDFs, audit trails, and any consent disclosures for the retention period.

Configuring an online NDA signing workflow

When you set up an online signing workflow, configure authentication, fields, and routing to match the agreement's complexity and risk profile.

Field Configuration
Signature Type Electronic signature with time-stamped audit trail
Authentication Level Email + SMS code or ID verification for higher-risk deals
Signer Order Sequential routing when approvals must follow a defined order
Retention Settings Save signed PDF and certificate of completion automatically

Where to send and how signing typically flows

NDA execution can be a simple one-step exchange or a routed workflow with multiple approvers; plan for distribution and record capture accordingly.

  • Upload source: Start by uploading the finalized NDA document to the eSignature platform.
  • Place fields: Add signature, name, title, and date fields for each signer.
  • Add signers: Enter signer emails and set signing order or allow parallel signing.
  • Send and record: Send invites, capture signatures, and archive audit trail and signed document.

Technical considerations for electronic execution

Choose a platform that supports the file formats you use and provides an auditable signing trail and storage options.

  • File formats: PDF and DOCX supported; PDF/A for archival
  • Integrations: Connectors available for Salesforce, Google Workspace, NetSuite
  • Authentication: Email, SMS, KBA, or advanced signer verification

Which roles commonly prepare or sign NDAs

Match the NDA's complexity and execution procedures to the role involved: higher-risk disclosures generally require stronger authentication and legal review.

  • Legal and compliance teams managing legal language and risk allocation for corporate collaborations and M&A.
  • Business development and sales teams using NDAs for early-stage discussions and partner evaluations.
  • Product and engineering teams protecting technical designs, prototypes, and source code in partner or vendor talks.

Typical signatory authority and roles

General Counsel

General Counsel reviews and approves NDA language, negotiates scope and remedies, and certifies that the agreement aligns with corporate policy and risk tolerance.

Authorized Signer

An authorized officer or agent with corporate signing authority signs on behalf of the entity; confirm authority through corporate resolutions if required.

Security and compliance checkpoints for electronically executed NDAs

Encryption in transit: TLS 1.2/1.3
Encryption at rest: AES-256
Access controls: Role-based access
Audit trail: Tamper-evident logs
Certifications: SOC 2 Type II, ISO 27001
Regulatory support: HIPAA BAA available

Common preparation mistakes to avoid with NDAs

  • Overly broad or vague definitions that fail to identify what is confidential, creating enforceability risk and ambiguity in litigation.
  • Using an indefinite or excessively long confidentiality term that courts may refuse to enforce as unreasonable in scope.
  • Failing to confirm signer authority or corporate execution rules, which can void the agreement or delay enforcement.
  • Relying on signed images without preserving the audit trail and consent disclosure required for electronic signatures under ESIGN.

Legal risks and potential consequences of flawed NDAs

Loss of protection: Ambiguous terms can render confidentiality unenforceable
Monetary damages: Breach can trigger contract damages
Injunctive relief: Courts may grant injunctions to stop disclosures
Reputational harm: Leaks can damage customer and partner trust
Regulatory exposure: HIPAA or other rules may impose penalties
Enforcement costs: Litigation and counsel fees can be substantial

Practical tips to ensure NDAs are accurate and enforceable

Adopt consistent drafting, authentication, and record retention practices to reduce disputes and preserve enforceability across jurisdictions.

Confirm signer authority in advance
Verify corporate signatory power or provide a corporate resolution to avoid later challenges to execution authority and to speed enforcement if needed.
Use clear, narrow confidentiality definitions
Define confidential categories and exclude public or independently developed information to improve chances of court enforcement.
Preserve electronic audit trails and consent
Keep signed PDFs, timestamps, IP logs, and any ESIGN consumer disclosures to establish intent and attribution for e-signed NDAs.
Match execution method to risk level
Use stronger signer authentication, ID verification, or notarization for high-value IP transfers or regulated data exchanges.

How an NDA differs from similar agreement types

NDAs serve a narrower confidentiality function; other agreements may include confidentiality clauses but address additional obligations and remedies.

Criteria NDA Confidentiality Clause in Contract
Primary purpose protect secrets broader contractual obligations
Standalone document often no
Typical remedies injunctions & damages contract damages
Use case m&a, partnerships services, supply agreements

Typical eSignature vendor comparison for NDA execution costs and capabilities

Compare basic pricing and compliance capabilities when choosing a vendor for NDA execution; signNow appears first in the vendor list per platform comparison rules.

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 (Business Premium) Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year limit Varies by plan Varies by plan Varies by plan

NDA FAQs and troubleshooting

Answers to common questions about enforceability, signing options, and execution workflow for NDAs in the United States.


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