What Is Typically Included in a Non-Disclosure Agreement?


Quick Answer

A non-disclosure agreement typically lists the types of corporate information that a company wants to keep confidential, the types of corporate information the company does not consider confidential and specific time periods in which the parties maintain confidentiality, according to Nolo. A non-disclosure agreement also includes specific obligations of those signing the agreement and a list of potential consequences for breaking the agreement.

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Full Answer

A non-disclosure agreement protects trade secrets including inventions, formulas and client lists, explains Nolo. Companies may use a one-way non-disclosure agreement when disclosing confidential information to another party. When two companies disclose confidential information to each other, a mutual non-disclosure agreement protects the information shared.

Some companies create non-disclosure agreements for employees, notes About.com. These agreements go into effect at the start of employment and may extend for a period of time after employee termination. Non-disclosure agreements created for employees may list discussions about company stock, recent acquisitions or plans for expansion. In addition, companies may also require contractors, vendors or consultants hired to sign non-disclosure agreements as a way to protect confidential information concerning new products and proprietary ideas.

If one party breaks a non-disclosure agreement, the other party can sue for damages, according to Nolo. Most non-disclosure agreements list the state laws pertaining to these agreements and may also outline arbitration procedures.

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