Free template
Free Non-Disclosure Agreement (NDA) Template
Template Types
What Is a Non-Disclosure Agreement?
Copy section linkA non-disclosure agreement, also known as a confidentiality agreement, is a legally binding document that two or more entities sign to protect their confidential information from disclosure to third parties without permission. The parties can be:
An employer and an employee/intern;
Business partners;
A hiring entity and a third-party vendor/advisor;
A business and an investor, etc.
- Individuals younger than the age of majority (Alabama and Nebraska – 19 y.o., Mississippi – 21 y.o., other states – 18 y.o.). The contracts they sign are voidable.
- Individuals lacking contractual capacity due to mental illness, cognitive decline, or developmental disabilities who cannot fully understand the nature and consequences of the NDA.
- Individuals who are under the influence of alcohol or drugs at the moment of signing.
Why is a non-disclosure agreement important?
An NDA is not a promise to keep business information safe; it is legally enforceable and imposes legal obligations on the parties: if one of them breaches the NDA, the injured party can sue and seek compensation for financial losses.
A completed NDA template is typically signed when the parties enter a business relationship, together with an employment contract, but in some cases, it may be used later, when the parties gain access to more data.
A waiter or chef in a restaurant usually does not sign an NDA (unless it is a private or VIP establishment) because they do not handle sensitive information. However, if they are promoted to the manager position, the employer may ask them to sign an NDA.
One party cannot force the other party to sign an NDA. The terms are subject to negotiation and discussion, and if the parties don't reach an agreement, one party can refuse to sign and continue the relationship.
What Should Both Sides Agree Before Signing?
Copy section linkAn NDA aims to protect the Disclosing Party’s information and set clear rules for the Receiving Party on how to handle it safely. Therefore, before they create an NDA and sign it, the parties should discuss the following aspects of the agreement and make sure they understand and accept them:
| Term | Disclosing party’s interest | Receiving party’s question |
|---|---|---|
| Purpose | Limit use of the information to one project/task | Does it cover every stage of the work I’ll do? |
| Confidential information | Protect everything sensitive, marked or not | Is my prior knowledge excluded? What exactly is treated as confidential information? |
| Non-disclosure obligations | Ensure no information leaks in any possible way | Can I unintentionally breach the contract? |
| Term and termination | Protection for as long as the information has value | When do my obligations end? |
| Permitted disclosure | Advance notice before any legal disclosure | What if a court or agency asks me to disclose the information? |
| Return of confidential information | No copies left after the work ends | How do I handle automatic backups and copies the law requires me to keep? |
| Remedies | Immediate compensation for the financial and reputational losses | Is the penalty size reasonable, and do I have to pay legal fees? |
| Governing law | Disputes handled under familiar law | Does the law of the chosen state impose additional obligations on me? |
- A person’s place of living, work, or registration, but not their citizenship, usually determines which law applies and where you can enforce the NDA.
- Name a specific governing law and court, not “EU law” or “international law.”
- Local employment and whistleblower protections may limit the NDA restrictions.
- An NDA does not replace the privacy, data processing, and transfer terms required by laws like the GDPR.
- Confirm the signer’s authority to sign for their company, and check that the signature method and language meet local requirements. For instance, in the EU, the eIDAS Regulation applies.
- Ask a local lawyer to review the agreement.
How long is the NDA applicable?
There are three common options of when the Receiving Party has the right to share confidential information:
Once the NDA term ends.
The NDA term is a period during which the parties actively share confidential information. It starts on the Effective Date. The End Date, depending on the nature of the parties’ relationship and the type of information, can be fixed or perpetual, which means either party can terminate the agreement by giving a written notice to the other party.
According to the Common Paper 2024 report, NDA terms typically last:
- 1-year: 74%;
- 2-years: 15%;
- 3-years: 5%.
Once the term of confidentiality ends.
The term of confidentiality is the period during which the parties are obliged not to share confidential information. It can be longer than the NDA term and typically lasts from 1 to 5 years. For instance, 56% of Common Paper NDAs imply 2 years of confidentiality.
Never.
Some NDAs, like those applied to trade secrets, require an individual approach. In some cases, an NDA can suggest that the confidential information should stay so indefinitely.
Is the payment for breach mandatory?
The fixed payment for the breach is not mandatory. Typically, the Disclosing Party has several options for how to handle compensation:
Set the sum of liquidated damages: It is a fixed, pre-agreed sum that the breaching party is obligated to pay. The injured party does not have to prove its financial loss or justify its calculations; it is enough that the NDA terms have been violated.
There is no verified universal formula for how to calculate this sum, and there’s no guarantee it will be fully recovered. The final compensation size always depends on the governing law and the court decision.Request actual damages compensation: If no fixed sum is in the NDA, the compensation depends on the actual sum of financial losses the breach has caused. The injured party should prove the harm and justify the sum to the court.
Rely on Trade Secret Laws: If no fixed payment is stated in the NDA, and the injured party cannot prove losses, the court will apply Trade Secret Laws and oblige the breaching party to pay punitive and exemplary damages if misappropriation of a trade secret is proven. However, exemplary damages can be recovered only if the NDA contains the mandatory whistleblower disclosure.
Additionally, an NDA may contain a clause stating that the breaching party is obligated to cover litigation costs if they occur – attorney’s fees and court filing fees.
What Are You Protecting and Which NDA Do You Need?
Copy section linkNot all data needs protection. NDA is typically applicable to the types of information that can cause financial or operational harm if it leaks, such as:
Technical information: source code, algorithms, software architecture, product designs, etc.
Business information: business plans, marketing strategies, investment plans.
Financial information: company revenue, budgets, bank details.
Customer, partner, and supplier information: lists of clients and their contact details, supplier prices.
Employee information: personal data, salaries, performance reviews.
Internal operational information: policies, security protocols, passwords, terms of the NDA.
Here are a few illustrative examples of situations when an NDA form template can be used:
A small online shop employs a developer to connect its store to a new email tool. The shop shares its system logins and a sample of its customer list. The employer's first draft of the employee NDA states that all information the developer can access remains confidential forever, with no exceptions. The employee rejects these terms.
Outcome: The developer asks the employer to provide a detailed list of confidential information and set a fixed confidentiality term. The employer suggests the information should stay confidential for three years. The parties agree and sign the employee NDA.
A design agency and a web development studio are working together on a redesign of a hotel website. The agency shares the client's brief, the project budget, and design concepts. The studio shares its rates, the technical plan for the booking system, and the reusable code components it plans to use. Because both sides share confidential information, they use a mutual NDA.
The parties agree the project information should remain confidential for 5 years, but during negotiations, they agree on 3 years.
Outcome: The NDA alone is not enough. Because the final product – the website – will belong to the hotel, the parties need to sign additional documents, such as an IP rights assignment agreement.
A clothing store hires a freelance marketer to run a three-month advertising campaign for a fee of $3,000. The store shares its customer email list, last year’s sales figures, and the launch date of a new collection. Since only the store shares confidential information, a unilateral NDA is used.
The store’s NDA draft sets a 3-year confidentiality term and penalty of $50,000 for any disclosure. The freelancer points out that this is more than 16 times the project fee and well above what they earn from this client in a year. One minor mistake, such as forwarding an email to the wrong address, could cost more than the work is worth. The freelancer suggests $6,000, which is twice the project fee.
Outcome: The parties review the contract and negotiate the agreement's terms. The hiring party agrees on the $6,000 penalty.
An event agency, a caterer, and a conference venue prepare a joint offer for a company’s annual conference for 300 guests. The agency shares the client’s information and budget details. The caterer shares its per-guest price, and the venue shares its rental rates and available dates. The three parties exchange information under one agreement, so they use a multilateral NDA.
The caterer asks whether it may share the deal details with temporary staff it hires.
Outcome: As the third parties get involved and request access to confidential information, the agreement requires further discussion before the parties sign. In particular, they should decide what specific information the staff need access to and how it can be protected. For instance, the staff may be asked to sign a separate unilateral NDA. Once all three parties reach an agreement, they sign the document.
How Does an NDA Work in Practice?
Copy section linkThe most important thing about the NDA is that everyone involved in it understands who shares information, who obliges to keep it confidential and for how long, and what the consequences will be if they fail. Let’s focus on Example 3 and see how the NDA works in it:
| Why is an NDA needed? | A clothing store hires a freelance marketer and shares confidential information. |
| Who is the Disclosing Party? | The online clothing store |
| Who is the Receiving Party? | The freelance marketer |
| What information is shared? | ● Customer email list; ● Last year’s sales figures; ● Launch date of a new collection. |
| What is the purpose of an NDA? | To perform services under the Independent Contractor Agreement. A clearly stated purpose gives the Receiving Party a better understanding of how and for what purpose they can use confidential information and emphasizes the business nature of the parties’ relationships. |
| How long should the information remain confidential? | 3 years. |
| What do the parties disagree on? | The size of the compensation the Receiving Party obliges to pay if they breach the agreement. |
| What is the outcome? | The parties: ● Agree on the $6,000 compensation. ● Decide the disputes will be resolved in the jurisdiction where the Disclosing Party is registered. ● Sign the NDA. |
How to Draft, Agree, and Sign Your NDA in Loio
Copy section linkOnce you and the other party have discussed all the terms of the NDA, you can easily create and sign the final document with Loio in 3 simple steps, without switching between apps:
1. Prepare
Create a new document, upload your draft, or choose the non-disclosure agreement template from Loio Templates. Answer simple questions, provide the requested information – and get the completed NDA in a few minutes.
2. Negotiate
Make sure the other party understands and agrees to the terms of the NDA. Share the current draft with them and annotate, suggest changes, corrections, or add clauses beyond a basic NDA template in Contract Editor together, directly in Loio.
Want to make sure you haven't missed any important details or made a mistake? Use AI Summary to review the document and detect red flags before signing. Discuss it with the other party and prepare the final draft.
3. Sign
Now, when your final version of the NDA is ready, add your electronic signature and request the other party's signature in two clicks. Note that every NDA, regardless of its type, requires the signatures of all involved parties to be legally valid.
Your NDA is ready. Access it anytime in your profile.
Can you write an NDA without a lawyer?
Yes, you can draft an NDA yourself. You can use a confidentiality agreement template, fill in the required information, and sign it. If the agreement handles trade secrets or high-value information, a lawyer’s review can be useful. The same rule applies if one of the parties is registered outside the US.
Does an NDA need to be notarized?
For an NDA to be legally binding, it should contain the signatures of all involved parties; no notarization is needed.
What are red flags in an NDA?
Before you sign an NDA, check if you understand all its terms. If you notice that the document has vague language, no list of confidential information, the penalties are too big, or confidentiality terms are unreasonably long, it is better to ask a lawyer to review it. Besides, the NDA should concern only confidential information. It cannot limit the parties' employment rights.
