Comprehensive Guide on the Elements of a Non-Disclosure Agreement in Rhode Island
A confidentiality agreement in Rhode Island also referred to as the non-disclosure agreement (NDA), secrecy or a confidential disclosure agreement refers to the legally binding contract created between two or more parties.
This contract outlines all the details of the confidential information, knowledge or material and it is used by companies to protect the secrets or proprietary information that gives a company its competitive advantage. Besides proprietary information like patents, trademarks, and copyrights, the NDA could be used to protect a company's trade secrets.
Although this is a term that is thrown around without much thought, a trade secret is the kind of information that gives a company its actual or potential economic advantage because it is unknown to the public or competitors.
The information could be in the form of a program, a process, compilation, method, pattern, formula, or technique that needs to be kept private for the success of a company; in the eyes of the law, it makes sense to take such measures like signing NDAs to protect the information.
Common uses or forms of the NDA
You will come across a confidentiality agreement when interacting with lawyers, doctors, banks or priests. You will come across or hear about doctor-patient CAs, bank-client confidentiality, priest-penitent privilege, and attorney-client privileges.
The NDA is also used commonly by employers when they want to protect trade secrets and also companies planning to go through takeovers or mergers. It could also be used by companies going into partnerships or the ones starting a joint venture. Once signed, the document creates a binding or a contractual relationship between the parties involved. You should, however, know that the NDA will not be enforceable if the activities protected in the NDA are felonies.
Now that you know how these contracts are used, it is important for us to look at the how to create the NDA. Unlike simple agreements for sales, asking someone to keep their mouth shut about a trade secret even after they no longer work for you will require a higher degree of professionalism.
First, you need to ensure that the document comes in the right format. For that, you have to download a free Rhode Island non-disclosure agreement form then fill it out while ensuring that it has all the clauses needed to protect your information.
Main types of NDAs
Unilateral NDA - this contract is also referred to as a one-way NDA; and as the name suggests, it's created between two parties. One party, the disclosing party, will plan to disclose confidential information to the receiving party, and since the disclosing party cannot trust the receiving party entirely, it uses the document to ensure that the information divulged does not reach the public or the competition. In the event of a breach, the receiving party will be held liable. The receiving party can only use the information given if they get a go-ahead from the disclosing party.
Bilateral NDA - this legally binding contract is also called a mutual or a 2-Way NDA. It is a binding contract created between two parties that wish to exchange trade secrets but at the same time ensure that neither party discloses the trade secret of the other. It protects you from further disclosure hence its commonality in joint ventures or mergers. In the real world, bilateral NDAs are used more often than the unilateral NDAs, because the unilateral NDA will often put all the blame on the receiving party in the event of a breach. The bilateral contract holds both parties liable, and it is regarded as fair and also balanced.
There is also a third type of NDA, the multilateral agreement. It's uncommon but comes in handy when three or more parties are required to maintain secrecy over confidential information. By using a multilateral NDA, you eliminate the need for separate unilateral or bilateral contracts.
What do you need to make the NDA enforceable?
Using your free non-disclosure agreement in Rhode Island, you will be able to effectuate the authority needed to protect the sensitive information that gives your company its competitiveness. Some of the critical elements of the NDA include:
A concise description of the confidential information: you may not want to hear this, but a blanket description of the confidential information you need protecting is not enough to secure that information. You need to indicate clearly what you don't want to be revealed to the public or your competitors. Some of the accurate descriptions you could use include marketing strategies, production methods, production software, customer/ vendor lists, or even accounting/ financial information, rather than 'important business information.'
While naming the information that is regarded confidential, you also need to indicate the kinds of information not considered confidential. To be on the safe side, note that non-confidential information will include information that the recipient of the trade secrets had prior knowledge of, information obtained subsequently from a different source, information available in public, or details subjected to subpoenas. The clause with the non-confidential information is the Exclusions Clause.
Obligations: besides keeping the information shared confidential; the recipient should not use the information or material gathered for personal benefit. The recipient should only use the information for the intended purpose; they should only disclose the information on a need-to-know basis. Note that the recipient is also expected to keep the information as reasonably possible and they also need to make sure that anyone learns about the trade secrets abides by the obligations outlined, and they restrict the use of and access to the information.
Time period: this is in the terms and the conditions of the contract. It is important to indicate how long the NDA is binding and where it could be used. In the terms and conditions, it's also important to indicate the jurisdiction where the law and the NDA are legally binding. Keep in mind the time during which the information is to remain confidential should be reasonable for the enforcement of the NDA.
This refers to an employment contract that is used by employers to limit or curtail an employee's ability to compete with their employer through the theft of trade secrets or customer/vendor information. Basically, it makes it impossible for the employee to compete with the employer directly and indirectly.
Among other restrictions, the non-compete will forbid an employee from working for the competition for some months up to 5 years after they leave employment. Also, the employee cannot set up a competing practice within a specific geographical radius and for a specific duration.
The court decides if the terms agreed upon are reasonable or not. While the court determines the reasonableness of the contract, you need to make sure that the contract strikes a balance between the protection of a business' legitimate interests and the employee's ability to get gainful employment in the area they have trained.
Initial or an offer of continued employment is yet to be lawfully regarded as sufficient consideration statewide.
Looking for an NDA form in Cranston, Warwick, Newport, Providence, Narragansett, Westerly, Bristol, Middletown, Coventry, or any other city in Rhode Island State? Perhaps you should consider our non-disclosure agreement forms available at no cost.