Nondisclosure Agreement

Model nondisclosure agreement

At the start of a business takeover, a merger or collaboration it is customary that parties sign a nondisclosure agreement. The purpose is to share confidential and competitively sensitive information that must be kept a secret. If only one of the parties shares information it is called a unilateral nondisclosure. If both parties exchange confidential information it is a matter of two-way or mutual confidentiality.

How to fill in the agreement

Please fill in the details of both parties and specify the purpose and the scope of confidentiality. It is also possible to make arrangements about a penalty, but this is optional. The amount of the penalty must be in proportion to the information shared. In most cases a  penalty of €10,000 or €25,000 is included.

Confidentiality applies from the date of signature of this statement and may be set for a maximum period of 3 to 5 years. Perpetual confidentiality, so without a specified duration, is not recognized by law.

Summary

Includes provisions about:

• The purpose of providing the information;
• Start date of meetings and exchange of information;
• Exceptions to the confidentiality;
• Destruction of information after expiry;
• Confidentiality after expiry;
• Penalty in case of breach of the agreement.

Context

This document can used in the following situation:
One or both parties intend to share information. Often this is the first step towards a takeover or collaboration agreement. In business it is common practice to make arrangements for confidentiality. By signing a statement both parties acknowledge confidentiality and the consequences of violating their obligation of secrecy.

There is always a field of tension between disclosure and competitively sensitive information. Our statement includes the rules of the game when dealing with confidential information. This model was drawn up by an experienced legal expert and is consistent with standard practice.