Can this agreement be signed electronically?

Yes. Electronic signatures are legally valid under the ESIGN Act (15 U.S.C. ch. 96, 2000) and UETA in most states; ensure intent, consent, attribution, and reliable retention to meet the four-part validity test.

Do I need a notary or witnesses?

Typically no for a standard confidentiality agreement; notarization or witnesses are only necessary if state law or a specific transactional requirement demands them, or if the agreement will be recorded with a public instrument.

How long should confidentiality last?

Set a defined term that matches the commercial value of the information; overly broad perpetual terms risk unenforceability—consider term plus survivals aligned with trade-secret expectations.

What if confidential data is healthcare-related?

If protected health information is involved, include HIPAA-compliant provisions and execute a Business Associate Agreement where applicable; follow 45 CFR §164.530(j) for retention and safeguards.

How do I revoke or terminate it?

Revocation procedures should be written in the agreement; termination typically affects future disclosures but does not undo obligations that survive per the contract’s survival clause.

What steps support enforceability?

Use precise definitions, reasonable duration, clear authorized-use limits, signed authorization by an authorized representative, and documented audit trails for electronically executed copies.

Electronic Signature
Templates
Legal
Proprietary Information Agreement

Proprietary Information Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

Proprietary Information Agreement

This Proprietary Information Agreement (the Agreement) is made and entered into as of Effective Date: by and between Disclosing Party: and Receiving Party: . Each of Disclosing Party and Receiving Party may be referred to herein as a Party and collectively as the Parties.

RECITALS

WHEREAS, Disclosing Party possesses certain proprietary, technical, business and financial information and other information of a confidential or proprietary nature that is valuable to Disclosing Party and not generally known to the public; and

WHEREAS, the Parties desire to disclose and receive such information for the limited purpose of evaluating and conducting discussions regarding: Purpose: (the Purpose); and

WHEREAS, the Parties wish to define their respective rights and obligations with respect to the protection and use of such proprietary information.

NOW, THEREFORE

In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

"Confidential Information" means all information disclosed by Disclosing Party to Receiving Party, whether disclosed orally, visually, in writing or by inspection, that is designated as confidential or that, under the circumstances of disclosure, ought reasonably to be treated as confidential. Confidential Information includes but is not limited to trade secrets, technical data, product plans, designs, specifications, drawings, prototypes, business plans, customer lists, pricing, financial information, software, source code, and any analyses, compilations, studies or other documents prepared by Receiving Party that contain or otherwise reflect such information.

Confidential Information expressly excludes information that: (a) is or becomes generally known to the public other than by breach of this Agreement by Receiving Party; (b) was rightfully in Receiving Party's possession prior to receipt from Disclosing Party, as shown by written records; (c) is independently developed by Receiving Party without use of or reference to the Disclosing Party's Confidential Information; or (d) is rightfully obtained by Receiving Party from a third party without breach of any obligation of confidentiality.

2. RECEIVING PARTY OBLIGATIONS

Receiving Party shall: (a) hold and maintain Confidential Information in strict confidence using at least the same degree of care that it uses to protect its own confidential information, but in no event less than reasonable care; (b) use Confidential Information solely for the Purpose; and (c) not disclose Confidential Information to any third party except as expressly permitted by this Agreement. Receiving Party shall limit disclosure of Confidential Information to those of its employees, officers, directors, advisors and permitted contractors who have a need to know and who are bound by confidentiality obligations no less protective than those set forth herein.

Receiving Party shall be responsible for any breach of this Agreement caused by its affiliates or permitted representatives. Recipient's obligations with respect to any summary, notes, analyses or other materials derived from Confidential Information shall be coextensive with its obligations with respect to the underlying Confidential Information.

3. PERMITTED DISCLOSURES

Notwithstanding the foregoing, Receiving Party may disclose Confidential Information to the extent required by applicable law, regulation or court order, provided that Receiving Party (to the extent legally permitted) promptly notifies Disclosing Party of the requirement and cooperates, at Disclosing Party's expense, in seeking confidential treatment, a protective order or other appropriate remedy.

4. TERM; RETURN AND DESTRUCTION

The obligations of confidentiality under this Agreement shall commence on the Effective Date and shall continue for Period (in years): years after the date of disclosure of each item of Confidential Information, unless a longer period is required by applicable law.

Upon Disclosing Party's written request, Receiving Party shall promptly return to Disclosing Party or, at Disclosing Party's option, destroy all Confidential Information and certify in writing to Disclosing Party that it has complied with such request. Select disposition: Return Destroy

5. NO LICENSE; OWNERSHIP

Nothing in this Agreement grants Receiving Party any right, title or license under any patent, trademark, copyright, trade secret or other intellectual property right of Disclosing Party, except the limited right to use Confidential Information solely as necessary to accomplish the Purpose. All Confidential Information and any derivatives thereof remain the sole and exclusive property of Disclosing Party.

6. REMEDIES

Receiving Party acknowledges that a breach of this Agreement may cause irreparable injury to Disclosing Party for which monetary damages may be inadequate. Accordingly, Disclosing Party shall be entitled to seek injunctive or other equitable relief in addition to any remedies available at law or in equity. The seeking of any remedy hereunder shall not preclude the seeking of any other remedy.

7. REPRESENTATIONS; NO WARRANTIES

EACH PARTY REPRESENTS THAT IT HAS THE AUTHORITY TO ENTER INTO THIS AGREEMENT. ALL CONFIDENTIAL INFORMATION IS PROVIDED "AS IS." DISCLOSING PARTY MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT WITH RESPECT TO CONFIDENTIAL INFORMATION.

8. INDEMNIFICATION

Each Party shall indemnify, defend and hold harmless the other Party from and against any direct losses, liabilities, damages and expenses (including reasonable attorneys' fees) arising from a breach of this Agreement by the indemnifying Party; provided, however, that recovery shall be subject to any limitations on liability agreed between the Parties elsewhere in writing.

9. NOTICES

Notices to Disclosing Party

Notices to Receiving Party

10. AMENDMENT; WAIVER; COUNTERPARTS

This Agreement may be amended or modified only by a written instrument signed by authorized representatives of both Parties. No failure or delay by either Party in exercising any right hereunder will operate as a waiver of such right. 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. A facsimile, electronic image or other reproduction of a signature shall be deemed an original signature.

11. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to choice-of-law principles. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and communications, whether written or oral. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.

12. MISCELLANEOUS

The obligations and rights of the Parties under this Agreement are binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns; provided that neither Party may assign this Agreement without the prior written consent of the other Party, except to an acquirer of substantially all of its business to which this Agreement relates. The headings used in this Agreement are for convenience only and shall not affect interpretation.

EXAMPLES OF CONFIDENTIAL INFORMATION

Disclosing Party may list particular categories or items of Confidential Information below (optional):

ADDITIONAL TERMS (OPTIONAL)

Additional terms agreed by the Parties:

Disclosing Party:

By:

Date:

Receiving Party:

By:

Date:

What a Proprietary Information Agreement Is

A Proprietary Information Agreement (also called a confidentiality or non-disclosure agreement) is a contract in which one or both parties agree to protect specified confidential information from unauthorized use or disclosure. It identifies the disclosing and receiving parties, defines the scope and types of information covered, sets permitted uses and exceptions, states the duration of confidentiality, and describes remedies for breach. The agreement can be executed between employers, vendors, contractors, or prospective partners and is enforceable as a contract under state law when signed by authorized parties.

Why Parties Use a Proprietary Information Agreement

A Proprietary Information Agreement creates clear obligations that protect trade secrets, confidential processes, and business plans. It reduces the risk of accidental disclosure, supports enforcement of intellectual property rights, and clarifies remedies and return obligations if confidentiality is violated.

Who Commonly Signs These Agreements

The agreement is used across organizations of all sizes whenever sensitive information will be shared between parties.

Employers and employees exchanging salary, technology, or business-plan details during hiring or employment.
Vendors and consultants given access to proprietary systems, customer lists, or source code while performing services.
Startups and investors sharing financial projections and product roadmaps during diligence and fundraising.

Use the agreement when disclosure is foreseeable; tailor scope and duration to the business relationship and applicable law.

Typical Roles That Prepare and Sign

General Counsel

Legal leads draft or review Proprietary Information Agreements to align confidentiality terms with broader IP strategy and litigation risk tolerances, ensuring enforceable definitions and appropriate remedies under state contract law.

HR / Hiring Manager

HR or recruiting managers use these agreements for new hires and contractors to protect onboarding materials, compensation details, and internal processes, coordinating with legal when language touches trade secrets or non-compete concerns.

Essential Data Fields in the Agreement

Parties: Names of disclosing/receiving parties

Effective Date: Date agreement begins

Definition: Scope of confidential information

Term: Duration of obligations

Permitted Use: Authorized uses only

Return/Destruction: How materials are handled

Common Legal Risks and Penalties

Trade Secret Loss: Irreversible commercial harm

Injunctions: Court orders to stop disclosure

Monetary Damages: Compensatory and punitive awards

Attorney Fees: Costly litigation exposure

Reputational Harm: Loss of business trust

Contract Voidance: Potential unenforceability risks

Frequent Preparation Errors to Avoid

Overly broad definitions that capture public knowledge or trivial details, which courts may refuse to enforce.
Failing to limit duration or purpose, creating perpetual obligations that are unreasonable under state law.
Not identifying a clear disclosing party, which complicates standing to enforce the agreement.
Relying on unsigned or informal exchanges without documenting intent and consent to electronic records.

Real-World Uses of a Proprietary Information Agreement

These examples show how different organizations use confidentiality agreements to protect sensitive information in common scenarios.

Product Development Collaboration

A software firm shares beta source code with a contractor for feature development.

The contractor signs a tailored confidentiality clause restricting use to the project.
The agreement clarifies scope, return of materials, and remedies, limiting risk and preserving the company’s trade secrets during joint workstreams.

M&A Due Diligence

A prospective buyer receives detailed financials during diligence.

Parties execute a one-way confidentiality agreement with explicit carve-outs for required disclosures.
The agreement defines confidential items, sets a finite review window, and requires certified destruction of copies after due diligence completes.

Step-by-Step: Completing the Agreement

Follow these steps to prepare, review, and finalize a Proprietary Information Agreement for standard use.

01

Prepare: Identify parties, effective date, and confidential categories.
02

Define: Limit scope, purpose, and exclusions clearly.
03

Review: Legal reviews for enforceability and applicable state rules.
04

Execute: Obtain signatures and record retention instructions.

Where to Send and Store Signed Agreements

After execution, route the signed agreement to internal and external stakeholders and store it securely with an audit trail.

Internal Legal: Central repository for contract management review and enforcement.
External Counsel: Send for tax, IP, or jurisdictional compliance checks.
Cloud Storage: Store signed copies in secure, access-controlled repositories.
Contract Management: Register key dates and renewal triggers for tracking.

Core Clauses That Make the Agreement Effective

A professionally drafted Proprietary Information Agreement contains specific clauses that limit ambiguity and support enforcement in disputes.

Confidential Definition

Provide a narrow, objective description of confidential information with examples and explicit exclusions such as public information and independently developed materials to avoid overbreadth challenges in court.

Permitted Use

Specify exactly how the receiving party may use disclosed information, for example 'for evaluation of a potential business relationship' and prohibit other uses to preserve remedies upon breach.

Term and Survival

State the confidentiality period and which obligations survive termination, balancing business needs against enforceability under state law and statutes of limitation.

Return and Destruction

Require certified return or destruction of tangible and electronic copies upon request or at the end of the term, including metadata and backups where reasonably practicable.

Remedies and Limitations

Include injunctive relief language, specify available damages, and note any caps or exclusions to align with negotiated risk allocation and local enforceability rules.

Governing Law

Designate the state law that will govern interpretation and disputes and, where appropriate, a forum for dispute resolution, mindful of ESIGN and UETA interplay for electronic execution.

Configuring an Online Signing Workflow

Set up a digital workflow to collect signatures, verify identity, and retain an audit trail when you execute a Proprietary Information Agreement electronically.

Field	Configuration
Signer Order	Sequential or parallel signing
Authentication	Email, SMS, or advanced options
Template	Save reusable agreement template
Expiration	Set reminders and access expiry

Digital Signing and File Requirements

Use platforms that support common file formats and integrate with contract systems to maintain secure records and audit trails.

File formats: PDF, DOCX, HTML supported
Integrations: Salesforce, NetSuite, Google Workspace
Authentication: Email, SMS, KBA, SSO options

Typical Timelines and Processing Expectations

While Proprietary Information Agreements are private contracts without statutory signing deadlines, standard internal timelines help ensure enforceability and operational clarity.

Drafting Time:

2–5 business days for a tailored agreement

Review Period:

5–10 business days for counsel review

Signature Window:

7–30 days depending on negotiation

Notarization:

If required, complete within 30 days

Record Entry:

Log executed agreement immediately in CM system

Key Milestones from Draft to Retention

Track these numbered stages to manage the agreement lifecycle and maintain compliance readiness.

01

Drafting Complete

Agreement language finalized and versioned for review.

02

Legal Review

Counsel confirms enforceability and risk allocation.

03

Execution

All parties sign and receive final, time-stamped copies.

04

Archive and Monitor

Store securely and monitor obligations through the retention period.

eSignature Vendor Pricing and Feature Snapshot

Comparison of baseline pricing and common feature availability for handling Proprietary Information Agreements; signNow is listed first per vendor ordering 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 vendor	Varies by vendor	Varies by vendor	Varies by vendor
Bulk Send	Yes	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	Varies	Varies	Varies

Frequently Asked Questions About Proprietary Information Agreements

Answers to common practical and legal questions about drafting, executing, and enforcing confidentiality agreements in the United States.

Need help? Contact support

Can this agreement be signed electronically?
Yes. Electronic signatures are legally valid under the ESIGN Act (15 U.S.C. ch. 96, 2000) and UETA in most states; ensure intent, consent, attribution, and reliable retention to meet the four-part validity test.
Do I need a notary or witnesses?
Typically no for a standard confidentiality agreement; notarization or witnesses are only necessary if state law or a specific transactional requirement demands them, or if the agreement will be recorded with a public instrument.
How long should confidentiality last?
Set a defined term that matches the commercial value of the information; overly broad perpetual terms risk unenforceability—consider term plus survivals aligned with trade-secret expectations.
What if confidential data is healthcare-related?
If protected health information is involved, include HIPAA-compliant provisions and execute a Business Associate Agreement where applicable; follow 45 CFR §164.530(j) for retention and safeguards.
How do I revoke or terminate it?
Revocation procedures should be written in the agreement; termination typically affects future disclosures but does not undo obligations that survive per the contract’s survival clause.
What steps support enforceability?
Use precise definitions, reasonable duration, clear authorized-use limits, signed authorization by an authorized representative, and documented audit trails for electronically executed copies.

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