This guide explains the key terms of the One-Way Non-Disclosure Agreement ("NDA") to help you understand its purpose and obligations. This guide is designed for busy professionals who want a quick, clear understanding of the contract and how to move forward.
Purpose of the NDA
The NDA establishes rules for the sharing of sensitive information ("Proprietary Information") from one party (the "Party") to another (the "Recipient"). This agreement is designed to protect the Party’s confidential information during business discussions. This agreement is not a two-pay confidentiality agreement, which means that it will only impose confidentiality obligations on the Recipient party, as opposed to both the Recipient and the Disclosing Party.
1. Definition of Proprietary Information
Proprietary Information includes any information shared by the Party that relates to:
- Business operations
- Research and development
- Financial data
- Marketing strategies
- Technical designs or software
Exclusions: Certain types of information are not considered Proprietary Information, such as:
- Information already known to the Recipient without confidentiality obligations.
- Information disclosed by a third party without restrictions.
- Publicly available information through no fault of the Recipient.
The agreement also protects details about the discussions themselves, including the fact that discussions are taking place.
Key Takeaway: Mark or clearly identify any confidential information you share to ensure it’s protected.
2. Restrictions on Use and Disclosure
The Recipient must:
- Use: Only use the Proprietary Information to evaluate or perform a potential business relationship.
- Confidentiality: Maintain the information’s confidentiality with reasonable precautions.
- Limit Access: Share it only with employees or agents who need it for permitted purposes and who are bound by similar confidentiality obligations.
- Prohibited Actions: Avoid copying, reverse-engineering, or exporting the information.
The Recipient must notify the Party promptly if they decide not to proceed with the business relationship or if any unauthorized use or disclosure occurs.
Key Takeaway: Protect the shared information as if it were your own sensitive data.
3. No Warranties or Licenses
The Party provides the information “AS IS,” meaning:
- No guarantees are made about its accuracy or completeness.
- The Recipient cannot claim any rights to the Party’s intellectual property.
Key Takeaway: The Party retains ownership of its information, and the NDA does not grant any usage rights beyond what is explicitly allowed.
4. Termination of the NDA
The NDA ends:
- When either party gives written notice, or
- Automatically after one year.
Confidentiality Continues: The Recipient must continue to protect disclosed information until it can be documented that it falls under the exclusions mentioned earlier.
After termination, the Recipient must return or destroy all Proprietary Information and any materials derived from it.
Key Takeaway: Confidentiality obligations extend beyond the termination of the agreement.
5. Remedies for Breach
The Party has the right to:
- Seek monetary damages.
- Obtain injunctions or other legal remedies to prevent breaches.
Key Takeaway: Breaches can have serious consequences, including legal action.
6. General Provisions
- Entire Agreement: This NDA is the sole agreement regarding confidentiality, replacing any prior discussions.
- Amendments: Changes must be in writing and signed by both parties.
- Governing Law: Florida law governs the agreement, and disputes are resolved in Palm Beach County courts.
- Legal Fees: The winning party in legal disputes can recover reasonable attorney fees.
- Severability: If part of the NDA is invalid, the rest remains enforceable.
Key Takeaway: These provisions ensure clarity and enforceability.
Frequently Asked Questions
What happens if the Recipient breaches the NDA? The Party can seek financial damages or court orders to prevent further breaches.
How long does the Recipient’s obligation to keep information confidential last? Until the information fits into an exclusion category, such as becoming public knowledge.
Can the NDA be modified? Yes, but only in writing and with both parties’ consent.
By following this guide, you can confidently navigate, understand, and execute your One-Way NDA, ensuring your business’s sensitive information is protected.