Drafting the Tightest NDA: Ensuring Iron-Clad Confidentiality
When dealing with sensitive information, the stakes couldn’t be higher. A well-crafted Non-
Disclosure Agreement (NDA) is the cornerstone of protecting confidential data while fostering trust
between parties. Recently, I revisited the process of drafting NDAs, focusing on creating a clause
that not only shields confidential information but also addresses potential vulnerabilities with
precision.
Key Changes I Made to Strengthen the NDA Provisions (other than standard provisions):
1. Definition of Confidential Information: The first step in creating a robust NDA is to
carefully define what constitutes "Confidential Information." In this case, I expanded the
definition to include not just written documents but also oral or electronic information shared
between the parties. The definition was made exclusive to ensure that only specific
information is covered and tailored to the needs of the agreement. I included language such
as:
“Confidential Information includes all information disclosed by one Party (the 'Disclosing Party')
to the other Party (the 'Receiving Party'), whether written, oral, or electronic, directly or
indirectly, and any other information shared between the parties.”
Note: Please customize this definition based on the specific requirements of the agreement,
including past and future disclosures, and mode of disclosures, if required.
2. Obligations of Confidentiality: To further strengthen the clause, I added that the
confidentiality obligations extend beyond the Receiving Party itself to include its employees,
agents, representatives, advisors, and affiliates. This ensures that the confidentiality
requirements are clearly communicated to all parties involved in the process.
3. Exceptions to Confidentiality Obligation (Importantly): This is one of the most crucial
aspects of an NDA. While exceptions are necessary, it's important to narrow them down to
avoid any loopholes. For example, I added that even if the information becomes publicly
available or is known to the Receiving Party prior to disclosure, they are still obligated to
protect it. I also emphasized that the Receiving Party must take all reasonable measures to
prevent unauthorized publication or misuse of the Confidential Information, at least to the
same standard they apply to their own confidential information.
The clause reads as follows: “Even if the information is or becomes publicly available through no
breach of this Agreement, or is known to the Receiving Party prior to disclosure by the
Disclosing Party without any confidentiality obligation, or is independently developed by the
Receiving Party without reference to or use of the Confidential Information, the Receiving Party
shall not publish any such information and shall take all reasonable measures to protect,
preserve, retrieve, and prevent the publication of such information, using at least the same level
of protection it applies to its own confidential information.”
4. Other Key Considerations:
− Return or Destruction of Confidential Information: Always include provisions for the
return or destruction of confidential information at the end of the agreement.
− No Transfer of Rights: Clearly state that the NDA does not transfer ownership or rights over
the confidential information.
− Duration of Confidentiality Obligations: The duration should be reasonable, ensuring that
confidential information remains protected for an appropriate period after the agreement
ends.
− Remedies: Don't forget to include provisions outlining the remedies available in case of a
breach of the NDA, which can act as a deterrent against any violations.
(A draft NDA sample template reflecting these changes is provided below.)
These changes are just a few examples of how I tightened the confidentiality provisions to create a
stronger NDA. I believe that a well-drafted NDA not only protects sensitive information but also sets
the foundation for trust between the parties involved.
Sample Non-Disclosure Clause Template
“NON-DISCLOSURE”
1. Definition of Confidential Information: For the purposes of this Agreement, "Confidential
Information" means any non-public, proprietary, or sensitive information, whether written, oral,
or electronic, disclosed by one Party (the "Disclosing Party") to the other Party (the "Receiving
Party"), directly or indirectly, including, but not limited to, business plans, financial data,
technical information, trade secrets, customer information, and other information shared between
the Parties.
2. Obligations of Confidentiality: The Receiving Party shall:
2.1. Keep the Confidential Information strictly confidential and not disclose it to any third party
without the prior written consent of the Disclosing Party, except as permitted under this
Agreement.
2.2. Use the Confidential Information solely for the purposes of performing its obligations or
exercising its rights under this Agreement.
2.3. Take all reasonable measures to protect the Confidential Information from unauthorized use,
access, or disclosure, using measures at least as stringent as those it applies to its own
confidential information.
2.4. Share the Confidential Information only with its employees, agents, representatives,
advisors, and affiliates (collectively, “Permitted Recipients”) on a strict "need-to-know"
basis and ensure that such Permitted Recipients are bound by confidentiality obligations at
least as stringent as those set forth in this Agreement.
3. Exceptions to Confidentiality: The obligations of confidentiality shall not apply to information
that:
3.1. Is or becomes publicly available through no breach of this Agreement by the Receiving
Party.
3.2. Was known to the Receiving Party prior to disclosure by the Disclosing Party without any
confidentiality obligation.
3.3. Is independently developed by the Receiving Party without reference to or use of the
Confidential Information.
3.4. Is required to be disclosed by law, regulation, or valid court order, provided that the
Receiving Party gives the Disclosing Party prompt written notice to enable it to seek a
protective order or other appropriate remedy.
3.5. Notwithstanding clauses 3.1, 3.2, and 3.3, the Receiving Party shall:
3.5.1. Refrain from publishing, disclosing, or otherwise making such information available
to any third party.
3.5.2. Take all reasonable measures to protect and preserve such information, applying
standards at least equivalent to those used for its own confidential information.
3.5.3. Use such information solely for the purposes specified in this Agreement.
4. Return or Destruction of Confidential Information: Upon the termination or expiration of this
Agreement, or upon the written request of the Disclosing Party, the Receiving Party shall
promptly return or destroy all copies of the Confidential Information in its possession or control
and certify such destruction in writing, except as required by applicable law.
5. No Transfer of Rights: Nothing in this Agreement shall be construed as granting any license or
ownership rights in the Confidential Information to the Receiving Party.
6. Duration of Confidentiality Obligations: The obligations of confidentiality under this clause
shall survive the termination or expiration of this Agreement for a period of [insert time, e.g., two
(2) years], or as otherwise required by applicable law.
7. Remedies: The Parties acknowledge that any breach of this confidentiality obligation may result
in irreparable harm to the Disclosing Party, for which monetary damages may be inadequate. The
Disclosing Party shall be entitled to seek injunctive relief and other equitable remedies in the
event of a breach or threatened breach of this clause, in addition to any other remedies available
at law or in equity.
