Connecticut NDA Template
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A Connecticut NDA, or “nondisclosure agreement,” is a form of a legal contract that helps both (or more) involved parties understand what information should stay hush-hush. It's a handy tool that businesses, and especially startups, use to safeguard themselves in case their employees or potential biz partners spill beans about their confidential business tidbits.
In essence, NDAs work as a protective shield for your trade secrets and other key information, like your business plan or client roster, keeping them out of the reach of snoopy competitors or the public eye.
Trade Secret Definition in Connecticut
Notwithstanding the provisions of sections 1-210, 31-40j to 31-40p, inclusive, and subsection (c) of section 12-62, “trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, process, drawing, cost data or customer list that: (1) 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 (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. (Connecticut Uniform Trade Secrets Act § 35-51(d))
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Read on to learn more about Connecticut NDAs, including:
What's included in a Connecticut NDA?
Here are some key components that are typically included in a Connecticut 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
In this specific area of the agreement, the party revealing the secrets, also known as the disclosing party, is the one sharing the confidential details. On the flip side, the accepting party, is the one getting their hands on this privileged information. In the case of unilateral NDAs, these distinctions are applicable - however, for mutual NDAs, each party plays both roles. This might seem a tad complex, but take note of the difference between "Company Name" and "individual". If you happen to be a solo player in this game, simply put your name down, as you aren’t representing a business entity.
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
When drawing up your NDA, an essential step is to outline what exactly constitutes as "confidential". Let's draw out a scenario - imagine a boss telling an employee that everything they say over the next 2 years is confidential. Fast forward a year, the employee is leaving, and the boss mentions it might rain tomorrow. Is it a breach of confidentiality if the employee shares this weather prediction with someone else? Certainly not!
Courts would never support such an overly broad definition of confidential information. On the contrary though, a too-narrow definition might expose pivotal confidential information to the receiving party, who's then free to share it.
While a majority of businesses utilize a fairly standard definition, it can feel a little puzzling. If you’re unsure, we highly recommend you delve into our extensive post about classifying confidential information in your NDA.
“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
Within all NDAs, including the template you'll find at your disposal, a "purpose" is outlined. You might, for instance, say something like "to produce a sample product for the revealing party", or "to assess the potential collaboration between both parties". This purpose matters because it stipulates why the accepting party can use the confidential details, which brings us to our next point.
Let's hypothesize you're trying to hire a developer for your website. Then you share your business plans with them to guide their understanding of the type of website to develop. In such case, you would want to specify the purpose as to be related with the "creation of..." followed by a description of the exact website features the developer will be creating.
Without such a defined purpose, there's a risk that the developer might leverage the confidential information to form a separate identical business and exploit the business’s secret information. In most instances though, the boilerplate language ("evaluating the parties’ capabilities of pursuing one or more business opportunities") should suffice.
But hey, take a look at this common purpose definition.
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
When you reach as far as signing an NDA, how you employ your confidential information is intrinsically tied to the aim of the NDA. Essentially, this part says you'll only use this privileged information for pre-set purposes. Suppose you find an instance where someone exploits the confidential information to the detriment of the firm? This segment ensures sensitive discussions stay within closed doors, shielding both parties from potential external risks or harm.
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
Okay, so you're handing over your information to the “Recipient”, but what if they represent another company? Or they need to discuss some details with their legal representative? This provision, aptly titled “Limited Access,” has got you covered in your NDA.
Most NDAs use a language similar to the template, but generally, you gotta think if anyone else needs access and then restrict the use of the information to those individuals. Whoever else the recipient might expose the information to, must also sign an NDA which agrees to the same 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 section that follows in the NDA is namely “exclusions”. We include exclusions to boost the chances that a court would uphold your NDA if it ever reached that stage. The only one you might need to reconsider is 4(a)(1) - but only if you've disclosed confidential information to the recipient prior to signing the NDA. In most scenarios, the exclusions stated are likely good enough.
(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
This part in the NDA covers the duration, or the effective period, of the NDA. Your NDA could cover a brief single transaction occurring over a few days, or you may want it to last indefinitely. The agreement should last as long as the relationship you foresee will take. Often, an NDA lasts longer than the actual transaction or working relationship, specifically, for as long as the trade secret remains just that, a secret.
You'll want to include a clause that makes it clear that the trade secret must remain protected even after the end of a business relationship or a contractual agreement. If you're unsure about what to put here, a good rule of thumb is that the average duration is between one to five years. And remember, the time frame needs to be as long as you need the information to stay confidential.
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?
If you've already disclosed confidential information to the other party before creating your NDA, no problem at all! We've got you covered. A few tweaks to the agreement will handle that just fine and here's how you do it.
How do I protect my trade secret?
The reason for using NDAs can be hinged on protecting your privileged information. But confidential information isn't valuable on its own - it’s just a piece of the puzzle. For the information to have value, it must qualify as a trade secret. If you’re feeling unsure about what a trade secret is, or how to ensure it’s given the rightful protection, do check out our guide on the matter.