How to Write a Standard NDA

Watch more Business Communication videos: howcast.com/videos/429833-How-to-Write-a-Standa…

Create a standard non-disclosure agreement, or NDA, to protect your confidential business information from disclosure to outside persons or entities. Make sure your NDA complies with your state laws.

Step 1: Decide if your information requires an NDA
Decide if your information requires an NDA. For example, does your trade secret give you a competitive advantage in the marketplace? If not, you may not need a legal document. If it does, however, you want the secret to be legally protected.

Step 2: Know about standard NDA types
Know about standard NDA types. In a one-way NDA, only one party is making a disclosure. In a mutual NDA, both parties reveal confidential information.

Tip
An example of a mutual NDA might be that you reveal your soft drink recipe to a beverage company. In turn, they reveal their marketing strategy.

Step 3: Learn common NDA legal terms
Learn common NDA legal terms. The discloser and recipient are two NDA parties. A statement of reason describes the NDA's purpose.

Tip
A penalty clause is optional, and states the compensation amount for a breach of confidentiality.

Step 4: Search online for NDA examples
Search online for NDA examples. Many places, such as the Harvard Business School, make examples available. Use these samples as models when drafting your agreement.

Step 5: Buy an NDA template
Buy an NDA template from online legal services like NOLO or LegalZoom.com if not confident in your draft. Fill in the template with your confidential info.

Step 6: Go to the American Bar Association website
Go to the American Bar Association website to find a member in your state that specializes in contracts if you are still not confident creating your NDA. A good attorney will make sure that your NDA is legally binding, and you can rest certain that your trade secret is protected.

Did You Know?
Coca Cola's secret formula, code named "Merchandise 7X," is kept in a guarded Atlanta bank vault.