Story
The founder of this new software startup needed a Non-Disclosure Agreement (NDA) to safeguard their company’s code from being stolen. The startup operates in the communications/telephony industry. This NDA was primarily intended for contractors and full-time software developers hired from Sri Lanka. The parties agreed that the agreement needed to be governed by Sri Lankan law, protecting the company’s code, intellectual property (IP), and other proprietary assets from unauthorized disclosure.
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Results
This NDA would be a unilateral or “one-way” agreement involving two parties, where one party (the startup) would disclose confidential information to the other party (the contractor/employee). Unilateral NDAs are typically used to shield trade secrets when a business is developing a new product or service and seeks potential partners or suppliers.
What's covered in the NDA?
Definition of Confidential Information
We clearly defined what constitutes confidential information under the agreement. This may include code, algorithms, business plans, marketing strategies, etc.Scope of Confidential Information
The extent of confidential information being disclosed.Permitted Use
The authorized purposes for which the recipient (contractor/employee) can use the confidential information.Standard Exceptions
Identified any situations where the confidentiality obligation wouldn't apply, such as publicly known information or information independently developed by the recipient.Obligations of the Parties
Detailed the responsibilities of both the startup and the recipient regarding the confidential information.Remedies for Breach
Established the consequences for violating the NDA, such as injunctive relief or damage claims.
Return or Destruction of Confidential Information
Specified how the recipient should handle confidential information upon termination of the agreement (e.g., return or secure deletion).Confidentiality Term
Defined the duration for which the information must be kept confidential.Non-Solicitation
This clause restricts the recipient from soliciting employees of the startup.Non-Circumvention
This clause prevents the recipient from bypassing the startup to directly engage with a potential customer the startup introduced.Non-Compete
Restricts the recipient from working for a competitor for a certain period after the agreement ends.No Transaction Obligation
The fact of signing this NDA doesn't guarantee the recipient any business with the startup.Jurisdiction Clause
Sri Lankan law governs the interpretation and enforcement of the NDA.
