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2 min read

How to draft a compliant international non-disclosure agreement (NDA)

International non disclosure agreement
2 min read

How to draft a compliant international non-disclosure agreement (NDA)

Key Takeaways

  • Crafting an effective international NDA requires careful consideration of jurisdiction, governing law, and defining confidential information.
  • The NDA should clearly state the receiving party’s obligations and set a specific term for the agreement.
  • Consulting with legal professionals who are well-versed in the relevant jurisdictions is crucial to ensure compliance with all applicable laws.

In today’s interconnected business world, safeguarding your confidential information is crucial, particularly when dealing with partners, contractors, or employees from other countries. A Non-Disclosure Agreement (NDA) is a common tool businesses use to protect their valuable information, but crafting a compliant international NDA can be challenging. Let’s explore some essential steps to create an effective international NDA.

In today’s interconnected business world, safeguarding your confidential information is crucial, particularly when dealing with partners, contractors, or employees from other countries. A Non-Disclosure Agreement (NDA) is a common tool businesses use to protect their valuable information, but crafting a compliant international NDA can be challenging. Let’s explore some essential steps to create an effective international NDA.

Getting Started with NDAs

An NDA, also known as a confidentiality agreement, is a legally binding contract that establishes a confidential relationship. The party or parties signing the agreement agree that sensitive information they may obtain will not be made available to others.

NDA Sample
A non-disclosure agreement (sample)

Choosing Jurisdiction and Governing Law

When drafting an international NDA, it’s vital to determine which country’s laws will govern the agreement. For example, if a U.S. company is entering into an NDA with a German contractor, the agreement could be governed by the laws of either the U.S. or Germany. This decision has significant implications for the enforceability of the NDA and the remedies available in case of a breach.

Defining Confidential Information

A well-drafted NDA must explicitly define what constitutes “confidential information.” This may include trade secrets, business strategies, customer lists, proprietary software, and more. However, be cautious not to make the definition overly broad, as some jurisdictions may not enforce an NDA that they deem to be unreasonable in scope.

Clarifying Receiving Party’s Obligations

The NDA should clearly state the receiving party’s obligations regarding the confidential information. This typically includes obligations to use the information only for defined purposes, to keep the information secure, and not to disclose the information to third parties without prior written consent.

Setting the NDA’s Term

The NDA must specify the period during which the confidential information must be kept secret. This term varies depending on the nature of the information and the jurisdiction, but a term of two to five years is common.

Incorporating Standard Clauses

A well-drafted NDA will also include standard clauses such as a non-circumvention clause (preventing the receiving party from bypassing the disclosing party in business dealings), a non-solicitation clause (preventing the receiving party from poaching employees), and a remedies clause (outlining the actions the disclosing party can take if the NDA is breached).

Consulting Legal Professionals

When dealing with international NDAs, always seek the advice of legal professionals who are well-versed in the relevant jurisdictions. They can help ensure that the NDA is compliant with all applicable laws and is properly tailored to protect your company’s valuable information.

Wrapping Up

An NDA is a critical tool in your business’s legal arsenal, but it’s not a one-size-fits-all solution. Each international NDA should be crafted with care, keeping in mind the specific needs of your business, the nature of the information to be protected, and the laws of the relevant countries.

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At RemotePad, Lech draws on his professional experience to write about employment taxes and payroll (both remote, and in-office). Lech holds a Bachelors’ degree from the University of Kent, a Master of Arts (MA) from Kings College London, and professional payroll and tax qualifications. He has 20 years experience advising on all manner of tax and business planning matters.

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