Arizona NDA Template
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An Arizona NDA, or “nondisclosure agreement,” is like a friendly handshake between two or more parties that keeps everyone on the same page about which information should be kept under wraps. Usually seen hanging out with startups and businesses, NDAs are perfect buddies to have around when you want to ensure that employees, potential partners, and other insiders won't spill your business's sensitive secrets. By having an NDA around, you can keep your company's valuable trade secrets and other important details – think your master plan or your client Rolodex – safely within your circle, away from prying eyes or rival companies who might want to sneak a peek.
Trade Secret Definition in Arizona
“Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique or process, that both:
(a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.
(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. (Arizona Uniform Trade Secrets Act § 44-401(4))
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Read on to learn more about Arizona NDAs, including:
What's included in a Arizona NDA?
Here are some key components that are typically included in a Arizona Nondisclosure Agreement:
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Disclosing and Receiving Party
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Definition of Confidential Information
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NDA Purpose
- Use of Confidential Information
- Limited Access to Confidential Information
- Exclusions - What's not Covered
- Term of Confidentiality Period
1. Disclosing and Receiving Party
We're talking about two sides of the NDA conversation here. The disclosing party brings the confidential info to the table, and the receiving party (you guessed it), receives it. This mainly matters with unilateral NDAs which have a single disclosing party but for mutual NDAs, it's a two-way street with both parties sharing secrets. A quick tip: if you're an individual doing the dealing, just use your personal name instead of a non-existent company name.
This nondisclosure agreement (this “Agreement”) is dated [Date] (the “Effective Date”) and is between [Company Name of Disclosing Party; e.g. “Max Studios, LLC”; if you do not have a formal legal entity, use your legal name, e.g. “Max Smith”], (the “Company”), and [Company Name of Receiving Party; if receiving party does not have a formal legal entity, use their legal name] (the “Recipient”).
2. Definition of Confidential Information
In your NDA, you're going to want to clarify what exactly falls under the "confidential" banner. Too broad a definition, like saying "Everything I tell you in the next two years is confidential" likely won't hold up in court. Conversely, if you're too specific, you may inadvertently spill secrets that aren’t protected by the agreement. That’s why many choose to use a standard definition template as a good middle ground but be sure to review what makes something confidential information in our handy guide.
“Confidential Information” means any information that is proprietary or unique to the Company and that is disclosed by the Company to the Recipient during the term of this Agreement, including the following: trade secret information; matters of a technical nature such as processes, devices, techniques, data and formulas, research subjects and results; marketing methods; plans and strategies; information about operations, products, services, revenues, expenses, profits, sales, key personnel, customers, suppliers, and pricing policies; and any information concerning the marketing and other business affairs and methods of the Company which is not readily available to the public. “Confidential Information” also includes information of others that (1) is disclosed under this Agreement, (2) the Company is obligated to protect from disclosure or restricted from using or both, and (3) that would constitute “Confidential Information” if the information belonged to the Company.
3. NDA Purpose
NDAs need a reason, a declared 'purpose'. This purpose could be tangible, like the creation of a prototype, or they might be about possible future relationships. The purpose helps clarify why the receiving party needs the information and restricts how they can use it. For example, if you contract a developer to build your website, your NDA's purpose should clearly state this. Without a defined purpose, nothing will stop that developer from using your business information to set up a rival venture.
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
How you use the confidential information should align with why you signed the NDA. This provision means that the confidential information should exclusively serve the purpose declared. Picture a scenario, where someone uses the confidential information to exploit the disclosing party. Having this clause ensures conversations stay between the associated parties and shields against potential external risks.
The Recipient shall use Confidential Information only for the Purpose. Unless otherwise agreed in writing, neither party shall disclose to a third party the fact that discussions or negotiations are taking place concerning the Purpose or any of the terms or other facts relating to the Purpose, including the status of negotiations between the parties.
5. Limited Access to Confidential Information
Your NDA should address that your 'Recipient' could disclose some sensitive details to people within their company or, say, to a legal counsel. Ideally, you'd want to confine the circle of people knowing your confidential information to those who absolutely need to be aware. It's good practice to ensure these individuals also sign NDA terms similar to the original recipient.
The Recipient shall protect the Confidential Information from unauthorized use and disclosure using the same degree of care that it uses with respect to its own information of like importance, but no less than a reasonable degree of care. The Recipient shall retain the Confidential Information in confidence and shall not disclose Confidential Information to any third party without the Company’s prior written consent. However, the Recipient may disclose the Confidential Information to employees, contractors, consultants, and authorized representatives of the Recipient who (1) require access to the information for the Purpose, (2) are informed by the Recipient of the Recipient’s obligations under this Agreement, and (3) are bound by contract or fiduciary duty to obligations of confidentiality and use restrictions with substantially similar function, purpose, scope, and effect to those of this Agreement and that are at least as protective of the Confidential Information as this Agreement.
6. Exclusions - What's not Covered
Every NDA should entail "exclusions," to boost the chances of your agreement being enforceable by a court. There's usually no harm in the predefined exclusions unless you have already shared confidential information before signing the agreement.
(a) This Agreement imposes no obligations upon the Recipient with respect to Confidential Information that: (1) was known to the Recipient before disclosure by the Company as evidenced by contemporaneous records; (2) has become publicly available through no fault of the Recipient; (3) is disclosed to the Recipient by a third party that has the right to make the disclosure to the Recipient and that does not have any obligation of confidentiality with respect to the Confidential Information; or (4) is disclosed by the Recipient with the Company’s prior written consent.
(b) If the Recipient is required by any governmental agency, court, or other judicial or regulatory body to provide any Confidential Information received under this Agreement, then the Recipient will not be deemed to be in violation of this Agreement for the disclosure if the Recipient promptly gives written notice to the Company of the requirement to provide the Confidential Information and cooperates with the Company so that the Company may contest the requirement to provide the Confidential Information. The Recipient may disclose only that portion of the Confidential Information that it is legally required to furnish.
7. Term of Confidentiality Period
NDAs specify a 'confidentiality period', or a term, during which the pact holds. For some, it's a few days or until the completion of a job; for others, it’s indefinite. Usually, the NDA lasts longer than your specific interaction or relationship. The key is to protect your secrets for as long as they need to be secret. That's potentially even after the end of your contractual relationship. Generally, the time frame ranges between one and five years, but remember, it should protect your information for as long as you need it under wraps.
This Agreement will continue for a period of one year from the Effective Date unless: (1) terminated earlier by either party upon written notice to the other; (2) extended by the mutual written agreement of the parties; or (3) superseded by a subsequent written agreement that explicitly sets forth the obligations of the parties with respect to Confidential Information. With respect to business information, the Recipient’s obligations of confidentiality and non-use under this Agreement will expire three years from the termination of this Agreement. With respect to all information that constitutes a trade secret, the Recipient’s obligations of confidentiality and non-use under this Agreement will survive the termination of this Agreement for as long as such information remains a trade secret under applicable law.
What happens if I've already disclosed confidential information?
Spilled the beans already? Well, it's not the end of the game. There are adjustments you can make to turn things around. Just see how we can help you.
How do I protect my trade secret?
We use NDAs not just for the sake of it. They're tools to guard our valuable trade secrets. Not all confidential information is a trade secret though - it has to meet certain criteria to be classified as one. To guide your venture in distinguishing and preserving trade secrets, check our easy-to-follow guide.