New Jersey NDA Template
Last Updated:
A New Jersey NDA, or “nondisclosure agreement,” is a legal contract between two or more parties that outlines the confidential information that must be kept private. Startups and businesses often use NDAs as a safety net to prevent employees or prospective partners from disclosing sensitive information. These agreements help protect important aspects of your business, such as trade secrets, business strategies, and client lists, from falling into the hands of the public or competitors.
Trade Secret Definition in New Jersey
“Trade secret” means information, held by one or more people, without regard to form, including a formula, pattern, business data compilation, program, device, method, technique, design, diagram, drawing, invention, plan, procedure, prototype or process, 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. (New Jersey Trade Secrets Act NJ Rev Stat § 56:15-2)
Thank you for downloading!
How would you rate your free form?
Read on to learn more about New Jersey NDAs, including:
What's included in a New Jersey NDA?
Here are some key components that are typically included in a New Jersey 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 this section, the "disclosing party" is the entity sharing the confidential information, and the "receiving party" is the one obtaining it. For unilateral NDAs, these roles are distinct, while in mutual NDAs, both parties act as disclosers and receivers. Also, note the difference between "Company Name" and "individual" – if you're a person either disclosing or receiving information, simply use your name since there is no company involved.
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 creating your NDA, it's crucial to define what is considered "confidential information."Let's say an employer states, "Everything I tell you in the next two years is confidential." A year later, the employer mentions that it might rain tomorrow, and you share that with a friend. Did you breach confidentiality? Of course not!
Courts won't uphold such broad confidentiality clauses. However, if the definition is too narrow, you risk unintentional disclosure of confidential information that the receiving party could then share with others. Most businesses use a standard definition like the one in the template, but if you're unsure, refer to our post on 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, including the template, requires you to state its purpose. Potential purposes include "to manufacture a prototype product for the disclosing party" or "to evaluate the potential business relationship between the two parties." The purpose is essential because it dictates how the receiving party can use the confidential information.
For instance, if you're hiring a developer for your website and sharing your business plans, you'd want the purpose to be related to specific website components development. Otherwise, the developer could use the confidential information to create a competitive business for profit. In most cases, the template's language ("evaluating the parties' capabilities of pursuing one or more business opportunities") is sufficient. Here's a generic purpose definition.
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
How confidential information is used correlates with the NDA's purpose. This provision states that the information will only be used for the intended purpose. While this may seem obvious, it's essential to protect both parties from possible exploitation due to the unauthorized use of 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
When providing information to the "Recipient," consider cases where the recipient is a company or needs to consult a lawyer. Such situations are addressed in the "Limited Access" section of your NDA.
In general, think about the needed access to the information and limit it accordingly. When the recipient shares information with a third party, ensure that person also signs an NDA agreeing to identical terms. The template's language should suffice for most cases.
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 "exclusions" section in the NDA helps ensure that your agreement stands up in court, if necessary. The standard exclusions written in the template should work for most cases, except for 4(a)(1). Consider removing it only if you've previously disclosed confidential information to the recipient.
(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 provision outlines the NDA's duration. The term could cover a specific transaction lasting a few days or could last indefinitely, depending on the anticipated relationship. Often, the NDA's term extends beyond the business relationship or transaction, particularly to protect trade secrets for as long as they remain secret.
It's wise to include a provision stating that trade secrets must be protected even after ending a business relationship or contractual agreement. If you're unsure about setting the term, a typical duration ranges from one to five years. Remember, the period should span however long you need the confidential information protected.
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 shared confidential information with the other party, don't worry – we've got you covered. You'll need to make a few adjustments to the template. Here's how to do that.
How do I protect my trade secret?
The primary reason for using NDAs is to safeguard your valuable confidential information. However, the information itself must qualify as a trade secret to be deemed valuable. If you're uncertain about trade secrets, whether your information qualifies, or how to adequately protect it, take a look at our guide on the subject.