Make a North Carolina Non-Disclosure Agreement

North Carolina State Laws

North Carolina’s Trade Secrets Act, NC Gen Stat §§ 66-152 through 66-157 , governs trade secrets as they relate to non-disclosure agreements. North Carolina’s Trade Secrets Protection Act provides civil remedies for misappropriation of trade secrets, including the possibility of punitive damages. The law also explains the evidence that must be provided to meet the burden of proof.

A non-disclosure agreement is just one contract that can be used to protect a business. Businesses should also use a North Carolina non-compete agreement for extra protection.

Definition of “Trade Secrets”

Confidential business information is referred to as a “trade secret.” NC Gen Stat § 66-152 provides a legal definition for the term. It is business or technical information that includes but isn’t limited to formulas, patterns, programs, devices, compilations of information, methods, techniques, or processes with their own actual or potential monetary value.

A trade secret’s value is developed because it’s not information that the public or other businesses have access to or that they can figure out through their own development or reverse engineering processes. A business must also take reasonable methods to protect the secrecy of that information. Trade secrets may be owned by one or more persons.

How to Write a North Carolina Non-Disclosure Agreement

To write a basic North Carolina non-disclosure agreement, review North Carolina's Trade Secrets Protection Act. This will help you better understand what is and isn't protected under the law. However, this is no substitute for legal advice.

• The opening paragraph first introduces the parties. The Disclosing Party is the business with trade secrets to protect. The Receiving Party is the third-party who will receive access to the information. Then, the scope of the NDA is explained: to prevent the misappropriation of confidential information. An effective date for the contract is also listed.
• Definition of "trade secret" according to state law. The North Carolina Trade Secrets Protection Act defines a trade secret as business or technical information such as a formula, pattern, program, device, compilation of information, method, technique, or process with actual or potential monetary value. The information gets its value because it isn't available to the public or other businesses in your industry to use. Your business must take reasonable steps to protect it. The trade secret may be owned by more than one person.
• Exemptions from confidential status. Common exemptions from confidential or trade secret status may include information that was made public at no fault of the receiving party, something learned or created by the receiving party before it was provided by the disclosing party, something learned by the receiving party by legitimate means without the assistance of the disclosing party or the disclosing party's agent, or something disclosed by the receiving party with the written consent of the disclosing party.
• Obligations of the receiving party. Common obligations include maintaining the confidential information in their highest confidence, restricting access to the information, and not using the information for their sole benefit without the written consent of the disclosing party.
• Relationship clause. Some North Carolina non-disclosure agreements may benefit from the inclusion of a relationship clause. It states that nothing within the agreement deems either party a partner, joint venturer, or employee of the other for any purpose.
• Jurisdiction clause. This clause is used to make the laws of North Carolina the laws that will be used to interpret the NDA as well as those that will be used to settle any disagreements that may arise between the parties.
• Severability clause. This clause is used to keep the remainder of the NDA enforceable if a North Carolina court holds that one clause is invalid.
• Integration clause. An integration clause states that the parties agree that the NDA expresses their full understanding of the subject matter and that it overrides all previous proposals, agreements, representations, and understandings. It also states that the NDA may not be amended except in writing and that the amendment must be signed by both parties to be valid.
• Waiver clause. A waiver clause is important because it states that if a party fails to exercise any rights from the NDA, that it does not waive any previous or subsequent rights.

The Disclosing Party and the Receiving Party should sign and print their names. The signatures should be dated. Each party should receive a copy of the finalized contract for their records.