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Comprehensive Guide on the Elements of a Non-Disclosure Agreement in Texas
With a confidential agreement in Texas, you get to protect your business’ trade secrets from the public and also away from your competitors.
As a legally binding document, also called the non-disclosure agreement (NDA) it makes sure that once the disclosing and the receiving parties sign it, they promise to protect/ restrict access to the information by third parties. Signing an NDA also means promising not to use the trade secrets they are protecting for personal gains, unless the recipient has the permission of the disclosing party.
To ensure that you do everything right, to avoid loopholes, and to ensure that the court grants you monetary relief, and/or an injunction relief in the event of a breach, there are specific you must adhere to when creating the document.
First, have to create the document. The best way to get started involves downloading a free Texas non-disclosure agreement form online. Once you have your NDA form, you should ensure that it captures all the details below.
Basic information in an enforceable NDA
Specifics of the NDA: A blanket description of the confidential information is not recommended. Specify the information you regard as confidential. Examples of confidential information include business strategies or practices, marketing strategies, software, customer/ vendor lists, accounting/ financial records, classified government information, designs and drawings, inventions, or hardware configurations, among others.
Note that confidential information will not include information that the recipient gets from third parties or information they had personal knowledge of, as well as information the recipient obtains or creates through reverse engineering. Also, publicly available information is excluded from the NDA, as is information that is to be shared after being served with a subpoena.
Duration: The NDA should have an effective and an expiry date. The effective date is the date that the recipient signs the NDA while the expiry date is when the recipient is no longer expected to protect the trade secrets.
In rare (but reasonable) cases, the expiry date is, but in most cases, the protection of the confidential information is lifted upon the expiry of the contract, after the completion of the transactions, or after a specific amount of time elapses.
Jurisdiction: this clause indicates where the NDA applies, and if the information is leaked within the said location, then the court finds the recipient in breach of the contract.
Obligations: by signing the NDA, the recipient, as well as their personal representative promises not to share the confidential information with other, protect and enhance the security of the information, and to prevent or restrict any unauthorized access/ disclosure of the information.
The recipient also promises to safeguard the confidential information reasonably and anyone else who needs the information gets to access it on a need to know basis. The recipient is also obligated to destroy or return the documents/ material relating to the confidential information upon expiry of the NDA, and he or she must inform the disclosing party immediately if they lose or disclose the information.
However, the recipient party is not obligated to reject proposals that are related to the created business relationship. Also, a recipient is free to walk out of negotiation at any time or for any (or no) reason. The only little catch here is that the receiving party cannot let others know about the discussions held with the disclosing party or the details of the transaction or relationship resulting from the contract.
Remedies to breaches: The disclosing party (injured party) may have to seek a court order to stop the guilty party from divulging more information. The injured party may also get an injunction relief, an equitable relief, or a special performance. Keep in mind that the injurious party pays the attorney fees as well as monetary and non-monetary damages.
As per the requirements of the state, both parties must sign the free non-disclosure agreement in Texas for its enforcement.
If you’d like to limit an employee’s ability to compete with you by stealing and using your trade secrets or information like the list of your existing customers or vendors, you might want to create an enforceable non-compete agreement.
But, creating a restrictive document is not enough; you also need to ensure that the terms of the non-compete strikes a balance between offering protection to the legitimate interests and secrets of the company from unfair competition; while ensuring that the employee’s right to work at a specific field is not infringed. The state requires that the geographical and time restrictions are reasonable.
The reasonableness also extends to the line of business and type of employment, where any imposed restriction should not make create hardships on the employee.
Besides being reasonable, the employer must offer sufficient consideration to the employee for promising not to compete. An initial employment offer is not, however, deemed a sufficient consideration but additional pay or even a promotion is accepted.
If you are looking for an NDA in Dallas, Austin, Houston, El Paso, San Antonio, Waco, Plano, Amarillo, Lubbock, Laredo or any other city in the state of Texas, you might want to try our non-disclosure agreement forms available online at no cost.