draft-nda

$27

Process

Step 1: Clarify Requirements

Before drafting, note down:

• Are both parties companies or is one an individual?

• What specific types of information will be shared?

• Is this one-way (only one party shares) or mutual (both parties share)?

• What is the geographic jurisdiction?

• What is the intended duration of the NDA?

Step 2: Structure the NDA

Organize the NDA in standard sections:

• Preamble (Parties, definitions, effective date)

• Definitions (What is "Confidential Information"?)

• Obligation to Maintain Confidentiality (Core obligation)

• Permitted Disclosures (Exceptions to confidentiality)

• Term and Duration (How long does the NDA last?)

• Return or Destruction of Information (What happens after?)

• Remedies (Consequences for breach)

• General Provisions (Governing law, jurisdiction, severability)

Step 3: Use Plain Language

Write each section in clear, accessible language. Avoid legal jargon where possible. Define terms the first time they're used.

Step 4: Highlight Clauses Needing Legal Review

Mark sections with [⚠️ LEGAL REVIEW REQUIRED] where customization or specific legal expertise is needed. Include explanations of what should be reviewed.

Step 5: Provide Context

Include brief notes explaining:

• Why each section is important

• What decisions need to be made by the parties

• Common pitfalls or considerations

NDA Template Structure

Present the draft NDA in this order:

[COVER NOTE]

A brief note explaining the NDA's purpose, the parties involved, and key provisions.

[FULL NDA DOCUMENT]

The complete agreement ready for customization.

[NOTES ON KEY CLAUSES]

Explanations of important sections and what may need legal customization.

Key Sections to Include

Preamble

• Introduce both parties clearly with full legal names and addresses

• State the purpose: exploring a potential business relationship, partnership, merger, etc.

• Define the "Effective Date"

Definitions

• Confidential Information: Specify what is considered confidential (business plans, financial data, technical specs, customer lists, etc.). Include scope.

• Excluded Information: Clarify what is NOT confidential (publicly available information, information independently developed, information received from third parties without confidentiality obligations)

Obligations

• Describe the receiving party's duty to keep information confidential

• Specify approved uses of the information

• Outline permitted disclosures (to employees, advisors, on a need-to-know basis)

• [⚠️ LEGAL REVIEW REQUIRED] Standard of care (e.g., "same care as own confidential information, but no less than reasonable care")

Permitted Disclosures

• Specify who can be told (employees, advisors, consultants on a need-to-know basis)

• Include a requirement that recipients also agree to confidentiality

• Add exception for legally required disclosures (with notice requirement, if possible)

Term and Duration

• Define the period during which information is being shared

• Define how long confidentiality obligations survive after the relationship ends

• [⚠️ LEGAL REVIEW REQUIRED] Consider different durations for different information types (trade secrets may require longer protection)

Return or Destruction

• Specify that the receiving party must return or securely destroy confidential information upon request or upon termination

• Option to certify in writing that destruction is complete

• Consider: does the receiving party keep one copy for legal compliance?

Remedies

• [⚠️ LEGAL REVIEW REQUIRED] State that breach may cause irreparable harm and that injunctive relief is available

• Clarify that remedies are in addition to other legal remedies available

General Provisions

• Governing Law and Jurisdiction: Specify which state or country's laws govern (e.g., California or England)

• [⚠️ LEGAL REVIEW REQUIRED] Dispute resolution process (litigation, arbitration, mediation)

• Severability: If one provision is invalid, others remain in force

• Entire Agreement: This NDA supersedes prior discussions

• Amendments: Specify that NDA can only be modified in writing, signed by both parties

• Counterparts: Parties can sign separate copies

Content Guidelines

• Plain Language: Write for a primary-school-educated reader. Avoid Latin phrases, unnecessary legal terms.

• Clarity over Precision: Choose clear language first. Legal precision can be refined by attorneys.

• Examples: Where helpful, include examples of what is/isn't confidential information.

• Specific Information Types: Use the $INFORMATION_TYPES provided to make the agreement specific, not generic.

• Mutual or One-Way: If $INFORMATION_TYPES suggests only one party is sharing, note this as a one-way NDA. If both, use mutual language.

Output Format

Present the NDA in three parts:

Part 1: Summary

Bullet-point overview of:

• Parties involved

• Information types covered

• Key duration and terms

• Jurisdiction

Part 2: Full NDA Document

A complete, ready-to-customize NDA document.

Part 3: Customization Notes

Guidance on:

• Sections marked for legal review

• Decisions parties need to make

• Common modifications based on situation

• Next steps (legal review, signing process)

Important Reminders

• This is a starting point, not final legal advice

• Jurisdictions vary widely; have a lawyer in the relevant jurisdiction review

• Some industries (tech, pharma, finance) have specific NDA conventions

• Consider mutual vs. one-way requirements

• Think about duration: How long should the information be protected?

• Always have an attorney review before any party signs