Make a Illinois Non-Disclosure Agreement

Illinois State Laws

In the State of Illinois, non-disclosure agreements are regulated by the Illinois Trade Secrets Act, 765 ILCS 1065 . Under the Illinois Trade Secrets Act, a non-disclosure agreement must set a time limit and a geographical limit that are considered reasonable. The restrictive covenants must also be considered reasonable. Illinois companies interested in using an NDA to protect their business should also use an Illinois non-compete agreement for maximum protection.

Definition of “Trade Secrets”

The term “trade secrets” is defined by the Illinois Trade Secrets Act as information that includes, but isn’t limited to, data that may be technical or non-technical, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, or a list of potential or actual clients or suppliers.

This information must be kept secret using reasonable methods by the company creating the NDA. The information must also have actual or potential economic value. The information may not be available to the general public or something easily discerned by other industry professionals.

How to Write an Illinois Non-Disclosure Agreement

To create a basic Illinois non-disclosure agreement, review the Illinois Trade Secrets Act before you begin the actual writing process. You must understand what the law says because you need your NDA to comply with the law.

However, creating your own is not a substitute for getting competent legal advice. We urge you to seek out a qualified Illinois lawyer to learn more about what you should include in an NDA for your business. Only then can you be sure that your NDA is properly written to protect your trade secrets.

• The opening paragraph identifies the parties. You are the Disclosing Party. You should include your name and your full address. Next comes the Receiving Party and their full address. This paragraph also explains the scope or the purpose of the document: to prevent the unauthorized disclosure and use of the company's trade secrets. You should also include an effective date.
• The definition of trade secret according to the Illinois Trade Secrets Act. That is, data or information that may be technical or nontechnical in nature such as a formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, list of possible or actual clients, or list of possible or actual vendors. It must have actual or possible economic value. The business must take reasonable steps to keep the information secret. The information must not be something that is easily discoverable by others in the industry or something that is known by the general public.
• Explain how the receiving party will know they receive confidential information. For example, will a confidential file be stamped "CONFIDENTIAL"?
• Exemptions from trade secret status. Examples include information publicly known at no fault of the receiving party, information or something created by the receiving party before it was told to or provided to the disclosing party, something learned by the receiving party on their own without the involvement of the disclosing party or the disclosing party's agent, or something shared by the receiving party with the written consent of the disclosing party.
• The obligations of the receiving party. Examples include keeping the trade secret information in the highest of confidence, carefully restricting access and only providing access upon written consent from the disclosing party, and not using the information to benefit the receiving party without the written consent of the disclosing party.
• A relationship clause. Some Illinois non-disclosure agreements benefit from a relationship clause because it states that nothing within the document makes either party a partner, joint venturer, or employee of the other for any purpose.
• A jurisdiction clause. This clause is used to state that Illinois laws will govern the agreement.
• A severability clause. This clause states that if an Illinois court finds any part of the NDA to be invalid, the remainder of the agreement will remain enforced.
• An integration clause. This clause states that the parties agree that the NDA expresses their complete understanding related to the subject matter and overrides all previous proposals, agreements, representations, and understandings. It is also used to state that if the parties wish to amend the NDA, it must be done in writing and even then the parties must sign the amendment.
• A waiver clause. This clause states that any party who fails to exercise any right presented in the NDA does not waive prior or subsequent rights.

At the end of the document, there should be a signature line for each party as well as space for them to print their name. Their title as it pertains to the contract should also be listed (Disclosing Party and Receiving Party) as well as their professional title. There should also be a space for the date the document was executed. Finally, each person should receive a copy of the finalized contract for their records.