Lawyer
Expert in international corporate, IT, and crypto law. Has extensive experience in business setup and support in the USA, EU, LATAM, and the Middle East. Specializes in corporate structuring, compliance, KYC/AML, IP, GDPR, as well as regulation of crypto and fintech projects.
Development of NDA (Non-Disclosure Agreement)
A Non-Disclosure Agreement (NDA) is needed by a business before confidential information reaches an employee, partner, investor, or contractor. Prikhodko & Partners develop NDAs as part of a comprehensive data protection and trade secret regime. As part of the NDA preparation service, we determine exactly what needs to be protected, who has access, and how to prove a violation.
The problem with most template NDAs is that they prohibit disclosing "any information" but do not establish a clear regime for its transfer, designation, and use. As a result, the document looks strict, but in a real dispute, it is difficult to prove that specific information was confidential and exactly what the counterparty violated.
Key points
- An NDA must clearly define the protected information and the permissible purpose of its use.
- A trade secret requires not only a contract but also an internal protection regime.
- Exceptions to confidentiality are needed for public, independently obtained, and legally disclosed information.
- The term of the NDA must correspond to the life cycle of the information, rather than being mechanically "perpetual."
- Liability must be real, proportionate, and provable.
- For international relations, applicable law, jurisdiction, and methods of enforcement are important.
When a business needs an NDA
It is advisable to sign an NDA before negotiations on investments, M&A, product development, joint marketing, outsourcing, or access to client bases. It is also needed with employees and key consultants who get access to the financial model, code, commercial offers, prices, suppliers, and internal processes.
The document can be unilateral or mutual. If information is exchanged by both parties, a mutual NDA usually better reflects the balance of interests.
What should be considered confidential information
- technical documentation, code, algorithms, and architecture;
- financial indicators, budgets, and business plans;
- client and partner bases;
- commercial terms, prices, and negotiating positions;
- personal data and information about employees;
- research results, prototypes, and know-how;
- information received from third parties under an obligation of confidentiality.
NDA and trade secret regime
A trade secret is protected more effectively when a company can show not only a signed NDA but also internal rules: a list of information, document labeling, access levels, transfer logs, security policies, and the procedure for returning materials.
If the company itself freely distributes information, does not restrict access, and does not explain the rules to employees, the demand for compensation for disclosure becomes significantly weaker. A legal document must support a real regime, not imitate it.
Typical weak points of an NDA
| Weak point | Consequence | How to fix |
|---|---|---|
| Overly broad definition | Difficult to prove the information was actually protected | Define categories and method of designation |
| No permitted purpose | Counterparty uses data more broadly than expected | Establish purpose limitation |
| No exceptions | Condition looks disproportionate | Describe standard exclusions |
| Unrealistic penalty | Sanction may be reduced or not applied | Link liability to damages and evidence |
| No exit procedure | Copies of data remain after cooperation | Provide for return, deletion, and confirmation |
What to do in case of a violation
- Immediately record the fact of disclosure, the source, and the circle of recipients.
- Restrict further access and change passwords or user rights.
- Send a written demand to cease use and preserve evidence.
- Assess damages, reputational consequences, and the possibility of interim measures.
- Choose negotiation, court, arbitration, or another mechanism provided for by the contract.
How a lawyer prepares an NDA for a specific business
First, information that has economic value and scenarios for its transfer are determined. Next, the lawyer establishes the purpose of access, the circle of permitted recipients, technical rules, term, exceptions, and liability.
For an international NDA, applicable law, court or arbitration, the possibility of urgent protection, and the admissibility of the chosen sanctions are analyzed separately. This approach is much more useful than copying a document from the internet that was drafted for another country and another model.
Conclusion
An NDA does not guarantee absolute secrecy, but a properly prepared document gives the business clear rules, an evidence base, and a response mechanism. Its effectiveness depends on the precision of the wording and the real information protection regime.
Prikhodko & Partners lawyers prepare unilateral and mutual NDAs, agreements for employees, contractors, investors, and international partners, and also help implement internal confidentiality policies. Entrust the development of contracts to specialists to turn confidentiality into real protection for your business.
Calculate the cost of services
1 question
Is a trade secret regime implemented in your company?
2 question
Do your employees have access to client bases and financial information?
3 question
Would you like to check your existing NDA agreement for legal risks?
Can an NDA be included in the main contract?
Yes. A separate document is convenient before negotiations begin, and in the main contract, confidentiality can be further detailed for a specific project.
Can an NDA be valid indefinitely?
For certain types of information, this is possible, but the term must be justified. Commercial value and the secrecy regime can change.
Is it mandatory to set a penalty?
No, but liability must be clear. You can combine a penalty, compensation for damages, termination of use, and other remedies.
Does an NDA protect a business idea?
An abstract idea itself is difficult to protect. An NDA protects specifically disclosed information, materials, calculations, prototypes, and know-how.
Is an NDA needed with an investor?
Yes, if the investor receives non-public information before signing the main documents. At the same time, professional investors may require special exceptions.
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