Virginia NDA Template
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A Virginia NDA, or “nondisclosure agreement,” is a legally binding contract entered into by two or more entities that outlines the information that you or other involved parties must keep confidential. Essentially, it's a tool leveraged by startups and businesses to safeguard themselves in the event an employee, potential business partner, or similar party attempts to share confidential details concerning the business.
Trade Secret Definition in Virginia
“Trade secret” means information, including but not limited to, a formula, pattern, compilation, program, device, method, technique, 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. (Virginia Uniform Trade Secrets Act § 59.1-336)
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Read on to learn more about Virginia NDAs, including:
What's included in a Virginia NDA?
Here are some key components that are typically included in a Virginia 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
Consider this part as an introduction of the principal characters in the Non-Disclosure Agreement (NDA) story—the party unveiling the secrets (the disclosing party), and the audience entrusted to guard these secrets (the receiving party). For single-sided NDAs, these roles are clear cut. However, in bilateral NDAs where secrets are mutually exchanged, both parties wear both hats.
In case you're an individual person involved in the information exchange, lacking the armor of a company, simply use your name to identify yourself.
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, it is critical to stipulate what constitutes the "need-to-know" information clearly. Think of it as defining the boundaries of your secret garden. An employers' forecast of tomorrow's weather doesn't fall in the confidential information sphere, needs court-protected silence.
If you draw too tight a boundary, you may inadvertently leave out critical information, making it fair game for public consumption. Typically, businesses use boilerplate language for this section, but when in doubt, you could refer to our comprehensive article dedicated to sketching out confidentiality in an 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
Like any binding agreement, your NDA requires a justifiable purpose. This purpose stands as the banner representing why the secret holder is entrusting their valuable information to another party. It could range from fabricating a prototype to gauging the potential of a prospective business relationship.
To elucidate, imagine seeking a developer's help for your website. Through an NDA, you share sensitive business plans for better alignment with your vision. Here, you would tailor the purpose to "website development", specifying the development areas to preclude any misuse of your shared blueprint for new business ventures.
In essence, the NDA purpose lays down the lawful territory within which the receiver can exploit the confidential information. However, most entrepreneurs could safely employ a broad language such as "assessing each other's potential for future business ventures."
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
The use of confidential details closely trails the NDA's purpose. This clause essentially means that the provided information should strictly serve the agreed-upon cause. Imagine a situation where someone manipulates the confidential information to their advantage—at the expense of the disclosing party. This provision ensures that your secret arsenal remains confined to the intended mission, shielding both parties from unforeseen collateral 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
Things get a bit tricky when the recipient of your confidential wisdom is a corporate entity or needs to consult the information with an advisor. The 'Limited Access' clause comes to rescue here.
Typically, the template's language will be sufficient. However, evaluate who really needs to be in-the-know and restrict the circle around those individuals. In case of any additional disclosure by the recipient, ensure the newcomer also signs off on similar 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 'exclusions' section might be perceived as the Achilles' heel of your NDA, but it's an essential evil to strengthen the credibility of your contract legally. The lone exclusion that requires your careful consideration is 4(a)(1)—only if you have prematurely shared confidential information. In every other situation, the default exclusions will do a fine job.
(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
Consider this clause as specifying the "best before" date for your NDA. It might pertain to a single, short-lived transaction, or you could design it to endure indefinitely. The term of your NDA essentially should cover the length of the projected relationship. Don't be surprised if the NDA outlives the actual partnership; it's common for NDAs to remain effective for as long as the underlying secret retains its confidential nature.
It's wise to specifically state that the duty to guard the confidential information persists even after parting ways in business. While the average term varies between one to five years, the key is to match the timeline to your need for the information to stay 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?
Didn't sign an NDA before spilling your top-secret information? Don't panic! We've got your back. A few modifications to the template can ensure retroactive protection for your already disclosed secrets. Let me show you how.
How do I protect my trade secret?
NDAs are to your confidential information what a lock is to a treasure chest. The true value, however, lies in the buried treasure—the trade secret. For your confidential information to carry any weight, it needs to qualify as a trade secret. If the realm of trade secrets feels like uncharted waters, fret not. Check out our handy guide on how to identify, qualify, and guard your trade secrets.