Updated July 27, 2020: 

A non-disclosure agreement attorney can help you draft an appropriate confidentiality agreement that minimizes the chances of a breach and maximizes your chances of winning the case if an unauthorized disclosure takes place.

What Is a Nondisclosure Agreement?

A confidentiality or nondisclosure agreement (NDA) is a contract executed to prevent disclosure of confidential information. One or more parties in an NDA agree to not disclose certain information to someone else.

NDAs are common between a company and an employee or an independent contractor. Many employees execute a nondisclosure agreement with their employers both when they start and end a job. These agreements restrict the employees from using the company's business information outside of the company, thereby helping companies protect their trade secrets.

Sometimes, two companies may enter into an NDA. It's commonly used in the real estate, aviation, and entertainment industries.

Unilateral and Bilateral NDAs

An NDA can either be unilateral or bilateral. In a unilateral NDA, only one party is obliged to keep the information private. Employment contracts usually contain unilateral NDAs. In a bilateral or mutual NDA, both parties to the contract are required to keep the information confidential.

Penalties for Violation of NDAs

Unlawful violation of nondisclosure agreements can result in penalties, monetary damages, and injunctions. In case of employment NDAs, such penalties can harm the employees in various manners like damaging their reputation, barring them from getting employment at other companies, and preventing them from starting a business. Penalties for breach of contract vary depending upon the situation and resulting damages.

Common Provisions in a Non-Disclosure Agreement

A nondisclosure agreement usually contains the following sections:

  1. Definition of Confidential Information: An NDA must clearly define the information that needs to be kept confidential. The NDA should be drafted so that the information to be protected is clear without disclosing it. For example, a film studio's NDA may require the script and star cast of a movie to be kept confidential until a certain period of time.
  2. Exclusion of Common Knowledge: An NDA often includes a list of situations under which the information may be disclosed. This list may include information which is publicly known or already known to the other party at the time of executing the agreement.
  3. Duration of Restriction: A restriction may not be enforceable if it's imposed for an unlimited period of time. Hence, NDAs often include a time period during which disclosure must not be made. The specific time period of restriction can be negotiated between the parties.
  4. Obligations of the Parties: This section outlines the obligations of each party. For example, it can say that the other party can't breach the agreement or allow others to access the information. You should be careful while using standard boilerplate provisions in an NDA. For example, if you say “all information related to the company's business,” a court may pronounce it to be too broad and unenforceable.

Non-Disclosure Agreement With a Lawyer

While engaging an attorney, you may be concerned about the confidentiality of your secrets since you may have to disclose some critical information to your attorney.

In most of the situations where confidential information is shared, a nondisclosure agreement can be helpful. It obligates the party privy to your secrets not to disclose the shared information.

However, the relationship between an attorney and a client is different from usual business relationships. It does not require execution of a formal nondisclosure agreement since all attorneys are bound by the attorney-client privilege rule. This rule automatically preserves the confidentiality of the communication, whether oral or in writing, that takes place between an attorney and his client.

The attorney-client privilege automatically applies when all of the following conditions are met:

  • An existing or prospective client communicates with an attorney for legal advice.
  • The attorney is acting in his professional capacity.
  • The client intends to keep the communication private and acts accordingly.

Thus, the attorney-client privilege does not apply in the following situations:

  • An attorney is acting outside his professional capacity, for example, as a friend, neighbor, etc.
  • The client does not show any intention of keeping the communication confidential. For instance, if he communicates the information in a public place to several people, attorney-client privilege would not apply.

The attorney-client privilege applies for an indefinite period of time. The attorney is bound to keep the information private even after the client's death.

If you need help finding a nondisclosure agreement attorney, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.