Non-Disclosure And Non-Circumvention Agreement Template

Purpose and Scope

A Non-Disclosure Non-Circumvention Agreement (NDNCA) is a legal document used to protect confidential information shared between parties. It ensures that the recipient of the information will not disclose it to unauthorized parties and will not use it for their own benefit without the disclosing party’s consent. The NDNCA also prevents the recipient from circumventing the disclosing party’s proprietary rights or business interests.

Key Components of an NDNCA

Definitions

Confidential Information: This term should be defined broadly to include any information that is not publicly known and that the disclosing party has designated as confidential.

Disclosing Party: The party that provides the confidential information.

Receiving Party: The party that receives the confidential information.

Non-Disclosure Obligation

The NDNCA should clearly state that the receiving party is prohibited from disclosing or using the confidential information for any purpose other than those expressly permitted in the agreement. This obligation should extend to the receiving party’s employees, agents, and contractors.

Non-Circumvention Obligation

The NDNCA should also include a non-circumvention clause that prevents the receiving party from attempting to circumvent the disclosing party’s proprietary rights or business interests. This could include activities such as developing competing products or services, soliciting the disclosing party’s customers, or hiring the disclosing party’s employees.

Exceptions to Confidentiality

The NDNCA may include limited exceptions to the confidentiality obligation, such as:

Publicly Available Information: Information that is already publicly known or becomes publicly known through no fault of the receiving party.

Independent Development: Information that the receiving party can demonstrate was independently developed without the use of the confidential information.

Required by Law: Information that the receiving party is required to disclose by law.

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Term and Termination

The NDNCA should specify the term of the agreement, which may be a fixed period or indefinite. The agreement should also address how it can be terminated, such as by mutual consent or upon a breach of the agreement.

Governing Law and Dispute Resolution

The NDNCA should specify the governing law that will apply to the agreement and the jurisdiction in which any disputes will be resolved. This can be important for international transactions.

Confidentiality Preservation

The NDNCA should require the receiving party to take reasonable measures to protect the confidentiality of the information, such as limiting access to authorized personnel and implementing security measures.

Indemnification

The NDNCA may include an indemnification clause that requires the receiving party to indemnify the disclosing party for any losses or damages resulting from the receiving party’s breach of the agreement.

Entire Agreement

The NDNCA should include a clause stating that the agreement constitutes the entire agreement between the parties and supersedes all prior or contemporaneous communications, representations, or agreements, whether oral or written.

Additional Considerations

Specificity: The NDNCA should be as specific as possible in defining the confidential information and the permitted uses of that information.

Confidentiality Marks: The disclosing party may require the receiving party to mark all confidential information with appropriate confidentiality notices.

Return of Confidential Information: The NDNCA may require the receiving party to return or destroy all confidential information upon termination of the agreement.

Reverse Engineering: The NDNCA may address the issue of reverse engineering, which is the process of analyzing a product or service to determine how it works.

See also  A mutual confidentiality agreement

Conclusion

A well-crafted NDNCA is a valuable tool for protecting confidential information and preventing unauthorized use or disclosure. By carefully considering the key components outlined above, parties can create an agreement that effectively addresses their specific needs and protects their interests.