Sample New York Non-Disclosure Agreement
The Dos and Don’ts of The Non-Disclosure Agreement in New York
It's one thing to ask an employee or a potential business partner to keep the details of your trade secrets, but asking them not just for their word but also asking them to sign a document to ensure that the details of the secret shared are kept under wraps.
By signing a document, you enter into a contractually binding relationship so that you will suffer consequences if you breach the terms of the agreement or basically break your word. A confidentiality agreement in New York (CA) is the document that creates that binding relationship between the parties involved. In other cases, it's referred to as a non-disclosure agreement or an NDA.
Since an NDA can be an area of contention among your employees, investors, inventors, and other entrepreneurs, you need to ensure that the document is in line with the statutory regulations. When presented in court, it should be deemed reasonable for it to take effects. While there are many cases where you will have to negotiate the terms of the NDA, you should know that there are times when the creation of an NDA is essential. These circumstances include:
During the hiring process for freelancers, consultants and employees who will have access to your company's proprietary information.
When negotiating the sale or the purchase of a business
When presenting a new product, design, or technology - trade secrets - to licensees, buyers or shareholders
When revealing trade secrets or financial records to an investor.
Considering the value of the confidential information or trade secrets to be shared, you need to ensure that the document created is airtight. To get started, you must download a free New York non-disclosure agreement form online. The format of the form ensures that you capture all the essential details of the NDA, leaving no loopholes or room for mistakes.
As you get ready to create your free non-disclosure agreement in New York, here are some of the things you should do and the ones you shouldn't.
Things to do
Be specific: You should specify the confidential information to avoid confusion. Since the information you consider confidential is different from what others may term confidential, you should be specific what you want to be kept private, or you could include your definition of confidential. Trade secrets are an example of confidential information but, using the general term 'trade secret' is inadequate. Identify that which sets your business apart.
Note that a trade secret represents the information (product, process, compilation, method, device, formula, recipe, or technique) that gives you a competitive edge. The confidential or proprietary information could also include customer/ vendor lists, personnel records, marketing strategies, pricing, financial/ accounting record, or proprietary technology or software. Regardless of the sensitivity of the information, you must be specific.
Roles/ obligations of the receiving party: The NDA must outline the specific duties of the receiving party. The obligations include prohibiting the receiving party from sharing the information to third parties and forbidding the third party from using the knowledge of the trade secret for personal gain.
Basically, the receiving party is obligated on non-disclosure and non-use. The level of restriction depends on the sensitivity of the information. But, keep in mind that the NDA is only enforceable if it's reasonable and not too constricting on the other party.
Under obligations, you also need to note down what the receiving party should do if compelled by the court or government to reveal the trade secrets. The NDA should indicate that the receiving party must comply if compelled though they should notify the disclosing party of the court order and that they should only reveal the required information.
Specify the jurisdiction: You need to indicate where the restrictions of the NDA apply. The restrictions could apply in a state, region, or country. Such geographic restrictions are important if you wish to maintain a competitive edge
Include non-compete or non-solicitation clauses: To ensure that your employee doesn't divulge your trade secrets to a direct competitor, work with/ for the direct competitor or set up a business that runs in the same manner as the employer's they have to sign a non-compete. The non-compete must have time, and geographical restrictions and the restrictions should be reasonable.
On the other hand, you may need a non-solicitation clause to prevent an employee or any other receiving party from disclosing the details of your customer list, soliciting clients or other employees to work for the ex-employee. Keep in mind that there should be adequate consideration for the NDA, especially where a non-compete or a non-solicitation clause is included. Also, the terms of these clauses must be reasonable within the geographical and time scopes.
Terms of a breach: Indicate in the NDA what consequences the receiving party will suffer in the event of a breach. Often, the consequences of a breach include money damages or an injunction relief. Using a remedies clause, a disclosing party has the right to seek an injunction relief and also to seek damages resulting from losses in profit.
Things not to do
Don't include details of information that is not confidential like details known to the public well.
Be careful not to reveal trade secrets before the receiving party signs the agreement and also share necessary information only.
Don't forbid third-party representatives like accountants, research assistants, attorneys, etc.
Avoid open-ended NDAs or gray areas.
If you are planning to create an NDA to protect the details of your new trade secret in New York City, Albany, Rochester, Syracuse, Buffalo, Ithaca, Utica or any other city in New York, get our free non-disclosure agreement forms available online today.
NY Non-Disclosure Agreement
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