Non-Disclosure Agreement (NDA)

A non-disclosure agreement (NDA) is a legal contract between two or more parties that protects confidential information shared during a business relationship. The party sharing the information (the “disclosing party”) requires the party receiving the information (the “receiving party”) to keep it secret and use it only for agreed-upon purposes. In Minnesota, trade secrets receive additional protection under the Minnesota Uniform Trade Secrets Act (MUTSA), Minn. Stat. Chapter 325C .

An NDA does not stop someone from working in your industry or for a competitor. It only prevents them from sharing or misusing the specific confidential information you disclosed.

When to Use This Template

• Sharing business plans with investors: You are pitching your business to potential investors and need to disclose financial projections, marketing strategies, or product roadmaps
• Hiring employees with access to sensitive information: New employees will have access to customer lists, trade secrets, proprietary processes, or internal financial data
• Discussing partnerships or joint ventures: You are exploring a business relationship with another company and both sides will share confidential information during negotiations
• Sharing proprietary processes with contractors: You are hiring freelancers or independent contractors who will work with your proprietary methods, software, or data
• Pre-acquisition due diligence: A potential buyer needs to review your company’s financial records, contracts, customer lists, and other sensitive business information before making an offer

Types of NDAs

Mutual (Bilateral) NDA

Both parties share confidential information with each other. This is common in partnership discussions, joint ventures, and merger negotiations where each side needs to evaluate the other’s business. Both parties are bound by the same confidentiality obligations.

Unilateral (One-Way) NDA

Only one party shares confidential information. The other party receives the information and agrees to keep it secret. This is common when hiring employees, engaging contractors, or pitching to investors.

This template supports both types. Choose the version that fits your situation when filling in the template.

How to Use This Template

1. Download the template in your preferred format (PDF or DOCX).
2. Choose the NDA type. Decide whether you need a mutual or unilateral agreement based on whether one or both parties will share confidential information.
3. Fill in the party names. Include the full legal names and addresses of all parties. For businesses, use the exact legal entity name (for example, “ABC Consulting LLC” rather than “ABC Consulting”).
4. Define the confidential information. Be as specific as possible about what information is covered. See the section below on defining confidential information.
5. Set the purpose. State the specific business purpose for which the confidential information will be shared (for example, “evaluating a potential business partnership” or “performing contracted software development services”).
6. Set the term. Decide how long the confidentiality obligations will last. Two to five years is common for most business relationships. Trade secrets may warrant longer or indefinite protection.
7. Review the standard exclusions. Make sure the listed exclusions (publicly available information, independently developed information, etc.) are appropriate for your situation.
8. Sign the agreement. Both parties should sign and date the agreement. Each party keeps a signed original. Notarization is not required but may be helpful for enforcement.

Defining Confidential Information

The definition of “confidential information” is the most important part of any NDA. A definition that is too broad may be unenforceable. A definition that is too narrow may leave important information unprotected.

What to Include

• Business plans and strategies – marketing plans, growth strategies, financial projections
• Customer and client lists – names, contact information, purchasing history, contract terms
• Financial data – revenue figures, profit margins, pricing structures, cost data
• Trade secrets – formulas, patterns, compilations, programs, devices, methods, techniques, or processes that derive economic value from being secret
• Software and source code – proprietary software, algorithms, databases, system architecture
• Proprietary processes – manufacturing methods, quality control procedures, internal workflows

Standard Exclusions

Most NDAs exclude certain categories of information from confidentiality obligations. These exclusions are standard and generally expected:

• Publicly available information – information that is already in the public domain or becomes publicly available through no fault of the receiving party
• Information already known – information the receiving party already had before signing the NDA
• Independently developed information – information the receiving party develops on their own without using the disclosing party’s confidential information
• Information received from a third party – information received from someone else who had the right to share it

Minnesota Trade Secret Law (MUTSA)

The Minnesota Uniform Trade Secrets Act provides legal protection for trade secrets beyond what an NDA alone can offer. If your confidential information qualifies as a trade secret, MUTSA gives you additional legal remedies.

What Is a Trade Secret?

Under Minn. Stat. § 325C.01 , a trade secret is information that:

• Derives independent economic value from not being generally known or readily ascertainable by others who could benefit from it, and
• Is the subject of reasonable efforts to maintain its secrecy

This includes formulas, patterns, compilations, programs, devices, methods, techniques, and processes. The key requirements are that the information has value because it is secret, and that you take reasonable steps to keep it secret.

Injunctive Relief

Under Minn. Stat. § 325C.02 , a court can issue an injunction (a court order) to prevent the actual or threatened misappropriation of a trade secret. This means you can get a court order to stop someone from using or disclosing your trade secret, even before a full trial.

Damages and Remedies

Under Minn. Stat. § 325C.03 , if someone misappropriates your trade secret, you can recover:

• Actual damages – the losses you suffered because of the misappropriation
• Unjust enrichment – the profits the other party gained from using your trade secret
• Reasonable royalty – if actual damages and unjust enrichment are difficult to calculate, the court may award a reasonable royalty instead

For willful and malicious misappropriation, the court may award up to double the amount of damages.

Attorney Fees

Under Minn. Stat. § 325C.04 , the court may award reasonable attorney fees to the prevailing party if:

• The misappropriation was willful and malicious, or
• A claim of misappropriation was made in bad faith or the information was resisted in bad faith

Statute of Limitations

Under Minn. Stat. § 325C.06 , you must bring a trade secret misappropriation claim within 6 years of the date you discovered (or should have discovered) the misappropriation. After 6 years, you lose the right to bring a MUTSA claim, though an NDA breach claim may have a different deadline.

Relationship to Minnesota’s Non-Compete Ban

Key Provisions Explained

Term and Duration

The “term” is how long the NDA lasts. There are two time periods to consider:

• The relationship period – how long the parties will share confidential information (for example, the length of a consulting engagement or employment)
• The confidentiality period – how long the receiving party must keep the information secret after the relationship ends

Common confidentiality periods range from 2 to 5 years after the relationship ends. For trade secrets, many NDAs extend the obligation for as long as the information qualifies as a trade secret under law, which could be indefinite.

Permitted Disclosures

Even with an NDA in place, certain disclosures are permitted by law:

• Court orders – if a court orders disclosure of confidential information, the receiving party must comply, but should give the disclosing party prompt notice so they can seek a protective order
• Legal requirements – if a statute, regulation, or government agency requires disclosure, the receiving party must comply
• Authorized representatives – the receiving party may need to share confidential information with their attorneys, accountants, or other advisors who need the information to provide professional services

Return of Materials

When the NDA relationship ends, the receiving party should be required to:

• Return all documents, files, and materials containing confidential information
• Delete all electronic copies of confidential information
• Certify in writing that all materials have been returned or destroyed

Remedies for Breach

If a party breaches the NDA, the non-breaching party may seek:

• Injunctive relief – a court order to stop the breach immediately, without having to prove monetary damages
• Monetary damages – compensation for financial losses caused by the breach
• MUTSA remedies – if the information qualifies as a trade secret, the additional remedies described above (including double damages for willful misappropriation)

Most NDAs include a provision stating that money damages alone would be insufficient to compensate for a breach, which makes it easier to obtain an injunction.

Governing Law

This template specifies that Minnesota law governs the agreement. If the parties are in different states, the governing law clause determines which state’s laws apply to any dispute. Minnesota law is generally favorable to disclosing parties because MUTSA provides strong trade secret protections.

Common Mistakes to Avoid

1. Defining confidential information too broadly. If your NDA covers “all information shared between the parties,” a court may find it unreasonably broad and refuse to enforce it. Be specific about the types of information covered.
2. Not marking information as confidential. Many NDAs require confidential information to be marked as such. If you share documents without a “Confidential” label, the receiving party may argue the information was not covered by the NDA.
3. Sharing information before the NDA is signed. An NDA only protects information shared after it is in effect. If you disclosed trade secrets before getting a signed NDA, those disclosures may not be protected.
4. Setting a confidentiality period that is too short. If your confidential information will remain valuable for many years, a 1-year confidentiality period leaves you unprotected after that time. Match the duration to the useful life of the information.
5. Forgetting to include standard exclusions. Courts expect NDAs to include reasonable exclusions. An NDA without exclusions for publicly available information or independently developed information may be seen as overreaching.
6. Using a mutual NDA when a unilateral NDA is appropriate. If only one party is sharing confidential information, a mutual NDA creates unnecessary obligations for the disclosing party. Use the right type for your situation.
7. Not keeping records of what information was shared. If a dispute arises, you will need to prove what information was disclosed and when. Keep logs, emails, and meeting notes documenting what was shared under the NDA.
8. Writing the NDA so broadly that it acts as a non-compete. Under Minn. Stat. § 181.988 , non-compete agreements are banned for most Minnesota employees. An NDA that effectively prevents someone from working in their field could be challenged as an unenforceable non-compete in disguise.

Related Resources

Intellectual Property Protection in Minnesota

• Minnesota Secretary of State - Business Services – business entity filings, registered agent information, and business records
• United States Patent and Trademark Office (USPTO) – federal registration of patents, trademarks, and copyrights
• Minnesota Revisor of Statutes - Chapter 325C (Trade Secrets) – full text of the Minnesota Uniform Trade Secrets Act