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View Full Version : Can you guys help me build a NDA or edit this one?



ali123
Nov 8th, 2008, 01:25 AM
Hey guys, an investor is going to meet me so we can talk about my idea and I would like to create a non disclosure agreement between us. As of now I'm not a corporation, I'm just a person, I will be providing the information but my dad will have to sign the contract, since I'm under the legal age to do so.

info: this idea is related to a website and some special software for it.

Thank you, Ali

Here is the best sample I can find but I'm not sure if this contract would be sufficient.


This AGREEMENT is made by and between Person A
and Person B effective as of November 8, 2008.



Project Reference: Information related, but not limited to, development
projects and assignments to be performed by the Recipient for the Company.



The Company possesses competitively valuable Confidential Information (as
hereinafter defined) regarding its current products, future products,
research and development, and general business operations. Recipient may
enter or has entered into a business relationship with the Company and in
connection therewith may need to review or use the Company's Confidential
Information and Materials or to create new Confidential Information and
Materials for the Company. In consideration of the promises and covenants
contained in this Agreement and the disclosure of Confidential Information
and Materials from the Company to the Recipient, the parties hereto agree
as follows:

1. Confidential Information and Materials

(a) "Confidential Information" shall mean any nonpublic information
that the Company specifically marks and designates, either orally or in
writing, as confidential or which, under the circumstances surrounding
the disclosure, ought to be treated as confidential or which the
Recipient creates or produces in the course of performing services for
the Company. "Confidential Information" includes, but is not limited to,
product schematics or drawings, descriptive material, specifications,
software (source code or object code), sales and customer information,
the Company's business policies or practices, information received from
others that the Company is obligated to treat
as confidential, and other materials and information of a confidential
nature.

(b) "Confidential Information" shall not include any materials or
information which the Recipient shows:
(i) is at the time of disclosure generally known by or available to
the public or became so known or available thereafter through no
fault of the Recipient; or
(ii) is legally known to the Recipient at the time of disclosure by
the Company; or
(iii) is furnished by the Company to third parties without
restriction; or
(iv) is furnished to the Recipient by a third party who legally
obtained said information and the right to disclose it; or
(v) is developed independently by the Recipient either before or
after the term of the Recipient’s engagement as a consultant or
independent contractor to the Company where the Recipient can
document such independent development.

(c) "Confidential Materials" shall mean all tangible materials
containing Confidential Information, including without limitation
drawings, schematics, written or printed documents, computer disks,
tapes, and compact disks (CD), whether machine or user readable.

2. Restrictions

(a) Recipient shall not disclose any Confidential Information to third
parties without the prior written authorization of the Company.
Notwithstanding the foregoing, Recipient shall not at any time disclose
to any third party any Confidential Information comprising a trade
secret of the Company or any Confidential Information of any other party
to whom the Company owes an obligation. However, Recipient may disclose
Confidential Information in accordance with judicial or other
governmental orders, provided Recipient shall give the Company
reasonable notice prior to such disclosure and shall comply with any
applicable protective order or equivalent.

(b)Recipient shall not use any Confidential Information or Confidential
Materials of the Company for any purposes except those expressly
contemplated hereby or as authorized by the Company.

(c) Recipient shall take reasonable security precautions, which shall
in any event be as great as the precautions it takes to protect its own
confidential information, to keep confidential the Confidential
Information. Recipient may disclose Confidential Information or
Confidential Materials only to Recipient's employees or consultants on
a need-to-know basis. Recipient shall instruct all employees given
access to the information to maintain confidentiality and to refrain
from making unauthorized copies. Recipient shall maintain appropriate
written agreements with its employees, consultants, parent,
subsidiaries, affiliates or related parties, who receive, or have access
to, Confidential Information sufficient to enable it to comply with the
terms of this Agreement.

(d) Confidential Information and Confidential Materials may be
disclosed, reproduced, summarized or distributed only in pursuance of
Recipient's business relationship with the Company, and only as
otherwise provided hereunder. Recipient agrees to segregate all such
Confidential Materials from the confidential materials of others to
prevent commingling.

ali123
Nov 8th, 2008, 01:27 AM
Continued...


3) Rights and Remedies

(a) Recipient shall notify the Company immediately upon discovery of any
unauthorized use or disclosure of Confidential Information or
Confidential Materials, or any other breach of this Agreement by
Recipient, and will cooperate with the Company in every reasonable way
to help the Company regain possession of the Confidential Information
and/or Confidential Materials and prevent further unauthorized use or
disclosure.

(b) Recipient shall return all originals, copies, reproductions and
summaries of Confidential Information and/or Confidential Materials then
in Recipient's possession or control at the Company's request or, at
the Company's option, certify destruction of the same.

(c) Recipient acknowledges that monetary damages may not be a sufficient
remedy for damages resulting from the unauthorized disclosure of
Confidential Information and that the Company shall be entitled, without
waiving any other rights or remedies, to seek such injunctive or
equitable relief as may be deemed proper by a court of competent
jurisdiction.

(d) The Company may visit Recipient's premises, with reasonable prior
notice and during normal business hours, to review Recipient's
compliance with the terms of this Agreement.

4. Miscellaneous

(a) All Confidential Information and Confidential Materials are and
shall remain the sole and exclusive property of the Company. By
disclosing information to Recipient, the Company does not grant any
express or implied right to Recipient to or under the Company patents,
copyrights, trademarks, or trade secret information.

(b) All Confidential Information and Materials are provided "AS IS" and
the Company makes no warranty regarding the accuracy or reliability of
such information or materials. The Company does not warrant that it
will release any product concerning which information has been disclosed
as a part of the Confidential Information or Confidential Materials.
The Company will not be liable for any expenses or losses incurred or
any action undertaken by the Recipient as a result of the receipt of
Confidential Information or Confidential Materials. The entire risk
arising out of the use of the Confidential Information and Confidential
Materials remains with the Recipient.

(c) Recipient agrees that it shall adhere to all U.S. Export
Administration laws and regulations and shall not export or re-export
any technical data or products received from the Company or the direct
product of such technical data to any proscribed country listed in the
U.S. Export Administration Regulations unless properly authorized by
both the Company and the U.S. Government.

(d) This Agreement constitutes the entire Agreement between the parties
with respect to the subject matter hereof. It shall not be modified
except by a written agreement dated subsequent to the date of this
Agreement and signed by both parties.

(e) None of the provisions of this Agreement shall be deemed to have
been waived by any act or acquiescence on the part of the Company, its
agents, or employees but only by an instrument in writing signed by an
authorized officer of the Company. No waiver of any provision of this
Agreement shall constitute a waiver of any other provision(s) or of the
same provision on another occasion. Failure of either party to enforce
any provision of this Agreement shall not constitute waiver of such
provision or any other provisions of this Agreement.

(f) If any action at law or in equity is necessary to enforce or
interpret the rights arising out of or relating to this Agreement, the
prevailing party shall be entitled to recover reasonable attorney's fees,
costs and necessary disbursements in addition to any other relief to
which it may be entitled.

(g) This Agreement shall be construed and governed by the laws of the
State of Illinois, and both parties further consent to jurisdiction by
the state and federal courts sitting in the State of Illinois.

(h) If any provision of this Agreement shall be held by a court of
competent jurisdiction to be illegal, invalid or unenforceable, the
remaining provisions shall remain in full force and effect. Should any
of the obligations of this Agreement be found illegal or unenforceable
as being too broad with respect to the duration, scope or subject matter
thereof, such obligations shall be deemed and construed to be reduced to
the maximum duration, scope or subject matter allowable by law.

(i) All obligations created by this Agreement shall survive change or
termination of the parties' business relationship.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized representatives as of the date first set forth above.


Party 1

By: ________________________________________

Name: ______________________________________

Title: _____________________________________

Address: ________________________________________

Date: _________________



Party 2

By: ________________________________________

Name: ______________________________________

Title: _____________________________________

Address: ________________________________________

Date: _________________

FazerRider
Nov 8th, 2008, 01:48 AM
if he steals your idea do you have enough cash to sue this investor? NDAs really don't mean ***** unless your bank account is big enough for a long lawsuit cuz not many lawyers would wanna represent you pro bono.

ali123
Nov 8th, 2008, 02:36 AM
if he steals your idea do you have enough cash to sue this investor? NDAs really don't mean ***** unless your bank account is big enough for a long lawsuit cuz not many lawyers would wanna represent you pro bono.

I was thinking that in case my idea happens to be somewhat successful, I don't want him using my business secrets and starting up a business just like mine within a year or two but with alot more capital invested. And of course if it does go successful, I'm willing to sue him as there is alot of profit that could be potentially made with this business

Thank you, Ali

slavka012
Nov 8th, 2008, 11:16 AM
buddy. finish the school and go to college. Investors won't sign NDA. And if he does, it does not mean ****. See, some of them get 1000 of ideas a days. May he has already seen this idea somewhere else. Besides, there is a difference between NDA and non-compete.

dirtmover
Nov 8th, 2008, 01:49 PM
Professional investors and VCs are not in the business of stealing your ideas. They are more interested in your credentials and business plan. Your idea is squat to them without a plan and the ability to execute on it.

Raptors
Nov 8th, 2008, 03:16 PM
Why do you need an investor? What happened to the $150,000 from selling your house in Calgary as mentioned in your "Best Buy" thread?

ali123
Nov 8th, 2008, 04:21 PM
buddy. finish the school and go to college. Investors won't sign NDA. And if he does, it does not mean ****. See, some of them get 1000 of ideas a days. May he has already seen this idea somewhere else. Besides, there is a difference between NDA and non-compete.

Well this investor told me he's willing to sign it and he's expecting to sign it , he's met me once before when I was doing a service for him and he knows my skills

ali123
Nov 8th, 2008, 04:24 PM
Why do you need an investor? What happened to the $150,000 from selling your house in Calgary as mentioned in your "Best Buy" thread?

That is my parents $ and they are willing to invest in the project but first they would like to see if the investor takes any interest in it as they don't really know much about the online market.

ali123
Nov 8th, 2008, 04:25 PM
Definitely ensure that any parties you disclose details to sign confidentiality and non-disclosure agreements BEFORE you disclose anything to them. Make sure 'consideration' is exchanged between the parties (e.g. $1, etc.) to meet one of the requirements of contract law.

Your best course is to retain a lawyer to draft the agreement for you and then use it. If your idea is as good as it is, you'd be a fool to try to do this yourself. Protection of valuable concepts is essential if you want to have any returns on it; otherwise, bigger/richer people can take it, market it sooner, and go the distance against you in any potential litigation. Even if they lose, it might be cheaper to just pay the damages if they make more money off of the concept or process in the long run (e.g. generic pharamaceuticals!).

Bottom line: get proper legal advice.

However, if you WILL be drafting this agreement yourself, make sure your dad (the adult who will sign on your behalf) meets the requirements of contract law, customizes its provisions to be specific to your jurisdiction (you'll note your agreement is an American one!), and of course, inserts provisions addressing liability, extent of damages, and the extent of protection this will afford to you (in trust) as well as others involved in the concept. I'm pretty sure not many people will offer to do this for you for free. So, you either have to pay a professional to do it or do it yourself----that's just life!

And by the way, do NOT listen to people who tell you such agreements are worthless. It is BETTER to have them, then not. And the reality is that true VCs DO and would expect to sign these types of agreements. Those that don't are either unprofessional, unsophisticated or simply not worth the risk! Those that have little experience with VCs and product development are usually the ones who will suggest you just share your idea because anyone can take it from you if they truly want to. They generally don't understand the difference between tort and contract law and the different damages that may arise separately and/or concurrently by violators who have signed such agreements.

Thank you for the excelllent input! I always enjoy reading your posts.

ali123
Nov 9th, 2008, 09:03 PM
Investor called me genious :cheesygri, although I'm still in the real world where this project could fail miserably.... because the marketing for it is complicated

Edit: wow got a hate pm for some reason....


Title: i thoug = thought but spelt wrong
Originally Posted by mtseymourguy
you are a ******

Kasakato
Nov 9th, 2008, 11:03 PM
I hope your NDA was modified for Canadian contract law. A poorly written NDA is hard to enforce.

ali123
Nov 10th, 2008, 12:01 AM
I hope your NDA was modified for Canadian contract law. A poorly written NDA is hard to enforce.

Yes I did some modifications to it, hopefully it will be enough to be considered legitimate

Thank you, Ali