Arkansas NDA Template
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An Arkansas NDA, or “nondisclosure agreement,” is like a secret handshake between two or more parties. It's a legal contract that spells out the information you and the other involved parties must treat as confidential. Startups and businesses use NDAs as a safety net, in case employees or potential partners decide to let their business's secrets slip. By putting an NDA in place, you're safeguarding your company's precious trade secrets and other valuable info—stuff like your business strategies or client lists—from landing in the wrong hands or falling prey to competitors.
Trade Secret Definition in Arkansas
(4) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
(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; and
(B) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. (Arkansas Theft of Trade Secrets § 4-75-601(4))
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Read on to learn more about Arkansas NDAs, including:
What's included in a Arkansas NDA?
Here are some key components that are typically included in a Arkansas 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
Think of this section as a scene in a play. The "disclosing party" is the character conveying confidential information, and the "receiving party" is the one catching that precious data. This setup generally applies to unilateral NDAs. In the case of mutual NDAs, it's like a choreographed dance where both parties both give and take. Remember, whether you're a "Company Name" or an "individual," the role remains the same. If you're disclosing or receiving information as an individual, let your name take center stage.
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
An NDA without defined 'confidential information' is like coffee without beans. Let's say your boss declares all conversations for the next two years as confidential. One day, you share a casual weather remark from your boss with a friend. Did you just spill confidential info? Unlikely, right? Courts won't enforce overly broad confidentiality clauses. However, craft it too narrow, and you risk letting confidential details slip into backstage gossip. Most businesses employ a standard definition, but if you're unsure, check our in-depth post about delineating confidentiality.
“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
Like any good spectacle, your NDA needs a purpose. It could be "prototype manufacturing for the disclosing party," or "assessing a potential business venture between the parties." The purpose sets the stage by outlining how the information recipient can use the intel.
For instance, you hire a developer for your website and share your business plans for a better design outcome. You'd want to specify the purpose as the "development of..." and detail out the website elements under their purview. A broad purpose could lead the developer to use your information as a springboard for a similar venture. Generally, the clause in the template suffices, but remember - it must fit your context.
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
The way you utilize the confidential information should align with the purpose of the NDA. This provision stipulates that the confidential details are used solely for the stated purpose. The scenario might seem self-evident; however, it prevents any opportunist in the scene from exploiting the confidential information.
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
Let's suppose the 'Recipient' of your confidential information is a business entity, or maybe the recipient wants to discuss the information with a legal advisor. How about that? Situations like these are taken care of in the 'Limited Access' part of your NDA. Usually, the template language is adequate. The movie set rule applies here - only the essential crew should know the details. If the recipient needs to share the information, they should make sure the second recipient also complies with the NDA terms.
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
The next scene to unfold in your NDA is 'exclusions.' These help ensure your NDA stands tall in the court of law, if it ever needs to. Consider removing 4(a)(1) only if the recipient has already seen your secretive scenes. Otherwise, the existing exclusions should fit most scripts.
(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
Just as a movie has a run time, your NDA needs a term— the period of its effectiveness. It might cover a short-term assignment or last for an unlimited duration, according to your needs. An NDA often outlasts the transaction or relationship it's protecting, specifically as long as it can guard your valuable secret. Here, remember that your trade secret needs protection even when the business relationship wraps up.
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?
A Quick Note: If your secret has already been shared with the other party, that's ok. We got you covered. Adjust the template accordingly. For more details, check out our guide.
How do I protect my trade secret?
Why do you need NDAs? To protect the crown jewel, your confidential information. But remember, the worth of confidential information lies in its status as a trade secret. If you are unsure of whether your information qualifies as a trade secret and how to guard it, our guide on that topic is just the ticket.