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

What to do in case of a violation

1. Immediately record the fact of disclosure, the source, and the circle of recipients.
2. Restrict further access and change passwords or user rights.
3. Send a written demand to cease use and preserve evidence.
4. Assess damages, reputational consequences, and the possibility of interim measures.
5. 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.