Explanation for BUSINESS NEGOTIATION Non Disclosure AGREEMENT
Below we provide an explanation for each of the provisions in the Business Negotiation Nondisclosure Agreement.
Fill in the date the agreement will take effect. This can be the date it's signed or a date in the future. Next, fill in your company name (you are the disclosing party). Finally, fill in the name of the outside individual or company being granted access to your trade secrets (the Receiving Party).
Select either Alternative 1 or 2, and delete the other. Here's how to choose:
Alternative 1. Use this clause if you can individually list the material being provided. However, be careful that your description is not so narrowly worded that it may leave out important information you want covered by the agreement.
Alternative 2. Use this clause if it's not possible to specifically identify the trade secrets-for example, if the information to be disclosed does not yet exist. This clause contains a general description of the types of information covered.
This clause makes clear that your trade secrets must be kept in confidence by the receiving party and may not be revealed to others without your prior written consent. It contains an optional provision requiring the fact that negotiations taking place are to be kept secret.
Here, the receiving party promises to return original materials provided by your company, as well as copies, notes and documents pertaining to the trade secrets. The form gives the receiving party 30 days to return the materials, but you can change this time period if you wish.
This provision describes all the types of information that are not covered by the agreement. These exclusions are based on court decisions and state trade secret laws that say these types of information do not qualify for trade secret protection.
There are two alternate provisions dealing with how long the agreement will stay in effect. Select the clause that best suits your needs and delete the other:
Alternative 1. This provision has no definite time limit-in other words, the receiving party must keep mum until the trade secret ceases to be a trade secret. This may occur when the information becomes generally known, you disclose it to the public, or it ceases being a trade secret for some other reason. This gives you the broadest protection possible.
Alternative 2. Some receiving parties don't want to be subject to open-ended confidentiality obligations. Use this clause if the receiving party insists that the agreement contain a definite expiration date. The Agreement should last as long as the information is likely to remain a trade secret. Five years is a common period, but it can be much shorter, even as little as six months. In Internet and technology businesses, the time period may need to be shorter because of the fast pace of innovation.
This clause makes clear that you are not granting any ownership rights in the confidential information to the receiving party.
A warranty is a promise. Here, you promise the receiving party that you have the right to disclose the information. This is intended to assure the receiving party that it won't be sued by some third party claiming that the trade secrets belonged to it and that you had no right to reveal them to the receiving party.
Here's an an explanation
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