Montana NDA Template
Last Updated:
A Montana NDA, or “nondisclosure agreement,” is a legal contract used by startups and businesses to safeguard valuable information. It's an agreement between two or more parties, outlining the confidential details each must protect. Designed to prevent employees or potential partners from disclosing sensitive information, NDAs are incredibly helpful in protecting your company's trade secrets, business strategies, and even client contact lists from the public or competitors. So, think of an NDA as a tool to keep vital aspects of your business safe and secure.
Trade Secret Definition in Montana
“Trade secret” means information or computer software, 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. (Montana Uniform Trade Secrets Act § 30-14-402(4)
Thank you for downloading!
How would you rate your free form?
Read on to learn more about Montana NDAs, including:
What's included in a Montana NDA?
Here are some key components that are typically included in a Montana Nondisclosure Agreement:
-
Disclosing and Receiving Party
-
Definition of Confidential Information
-
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 the context of a Non-Disclosure Agreement (NDA), two primary roles come into play - the disclosing party who shares the confidential information and the receiving party, which as the name suggests, receives it. This concept primarily applies to unilateral NDAs where only one entity discloses information. For bilateral NDAs, technically, both entities are both disclosing and receiving. Note that if you're an individual in one of these roles and not representing a company, simply use your personal 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
It's absolutely imperative that the NDA clearly defines what information is classified as 'confidential.' Imagine a scenario where an employer flippantly declares, “Every piece of information I share with you in the next 2 years is confidential.” Fast forward a year, you decide to quit and on your last day, the employer shares a weather forecast. Later that night, you chat about it with a mutual friend. Did you just disclose confidential information? Not at all!
An overly broad confidentiality clause would never be legally upheld. Conversely, if you narrowly define the clause, you risk potentially disclosing vital confidential information that the receiving party might freely share. It's a tricky balance to strike. Most businesses opt for a standard definition, but if you're uncertain, you can delve into our detailed post about defining 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
Every NDA must explicitly outline its purpose. For instance, it could state, “for the production of a prototype product for the disclosing party,” or “to assess potential business cooperation between the parties.” The purpose determines the context and manner in which the receiving party can use the confidential information.
Let's take an example. Suppose you're hiring a developer to create your website. You share your business plans to provide them a better sense of the website they need to build. In such a case, the NDA’s purpose should specifically be associated with the “development of…” followed by a detailed description of the website's aspects the developer will be constructing.
Without restricting the NDA's purpose, the developer could potentially use your confidential information to set up a similar enterprise and profit from it. Generally, the language in the pre-existing template (“assessing the parties’ potential for pursuing business opportunities”) should suffice.
Here is a standard definition of purpose.
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
The utilization of your confidential information is tied closely to the purpose that underlies your NDA. The agreement states explicitly that the confidential data can only be used to fulfill this declared purpose. Imagine a situation wherein someone uses the furnished confidential information to take advantage of the company. This provision ensures that the shared critical conversations and data remain within the confines of the agreement, thereby safekeeping both parties from potential external threats or damage.
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
Confidential information is usually passed on to 'Recipients.' But what if the recipient is a business entity? Or, what if the recipient has to consult with their lawyer? The 'Limited Access' part of your NDA acknowledges and addresses such scenarios.
For most situations, the standard language in the template should be acceptable. Nevertheless, always consider who needs to have access to the information, and make sure its usage is limited to those individuals. If the recipient divulges any information to another party, they should ensure this third party is also bound by an NDA with identical 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
Exclusions are the next crucial section of your NDA. These are necessary for ensuring your NDA stands a chance of being legally upheld should any dispute reach court. The primary one you may need to consider removing is 4(a)(1) – but, this should only be removed if you’ve disclosed confidential information to the recipient already. In most cases, the exclusions as structured are universally applicable.
(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 refers to the NDA’s actual life period, during which the agreement stays valid. This could extend across a specific single transaction lasting a few days or be indefinite. The chosen duration should cover the anticipated relationship length. In most cases, an NDA outlives the specific relationship or transaction, specifically as long as the trade secret remains confidential.
Consider including a clause that explicitly states that the trade secret must remain protected even after the conclusion of any business association or other contractual agreement. If you're uncertain about the period to select, bear in mind that the average is between one to five years. And keep in mind that the duration should 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 an external party, don’t worry! You can adjust the template to accommodate this. Let's look at how you can do this.
How do I protect my trade secret?
NDAs are extremely handy as they protect your confidential information. Remember, though – confidential information alone carries no value; it becomes valuable as part of the trade secret. To make your information truly valuable, it must qualify as a trade secret. If you're unsure what a trade secret is, or if your information counts as a trade secret, or even how to protect it effectively, take a look at our guide on the issue.