Agreement Templates Guides

Contents of a Non-Disclosure Agreement

The contents of a non-disclosure agreement should be brief and clear to both parties. Below is the content that should be included in a non-disclosure agreement:

Identification of parties signing the agreement

Information on the parties signing the agreement is described at the start of the agreement. Here, the party with the confidential information is referred to as the disclosing party, while the other party is the receiver.

Proprietary Information

The agreement has to make clear what is the confidential information that is being revealed by the disclosing party. The content in this segment must be detailed to ensure that there are no loopholes. The disclosing party has the responsibility of ensuring that the receiver has understood what it regards as the confidential information. On the other hand, the receiver must ensure that the confidential information has been identified and will not be used whatsoever. Usually, proprietary information is given in writing, to ensure that the receiver has a reference.


The business deal that the agreement covers should be legal. Additionally, the segment requires that the receiver of the confidential information should commit not to use the information given and also keep the information as a secret. Therefore, the receiver has the responsibility of protecting the information to ensure that no other party has access to the information.

One measure that the receiver could use ensures that only a few people have access to the information and these people should have knowledge of its restriction. There are situations that are considered burdensome for the receiver to keep the information as confidential, which include: when the receiver is aware of the information being regarded as confidential, the public can access the information, another party not involved in the agreement provides the receiver with information, and if the receiver develops information similar to the secret information with no malice involved. An example of the latter situation is when a recipe is involved and the receiver is able to come up with an exact recipe without breaching the contract. It becomes necessary to ensure that the receiver signs another agreement whereby the receiver party commits to lack knowledge about the confidential information.

Legal Action

The agreement should include information on the legal action that should be taken if the agreement has been breached. For instance, it can be stated that an employee will be liable for the damages incurred for the breach of the agreement including the costs accrued during court proceedings. The clause aims at protecting the receiver firm from the crime committed by an employee.

Time covered

The agreement should specify the term of the agreement. Even though a non-disclosure agreement is legally argued to last forever, the receiver would find it necessary to have a period defined, during which the agreement should be kept. Additionally, since the agreement restricts the receiver from using the information to compete with the disclosing party, the term agreement is important so that the receiver can be free to open a like-business in future. Usually, a term agreement runs for a period of three years.