Independent Contractor Non-Disclosure Agreement

With the current competitive economy, most businesses and organizations are not only improving their creativity and innovativeness but doing everything possible to outshine the competition. One significant and effective strategy companies use to reduce operational costs is hiring independent contractors. As compared to in-house employees, independent contractors work for themselves and are hired as a contract worker.

Since they are responsible for paying their taxes and insurance benefits, most companies use this chance to maximize their profit hence huge relief on their finances. However, before focusing on the profit maximization, it’s equally important to consider other risks associated with hiring such contractors.

As part of your workforce, the independent contractors may get access to your confidential or proprietor information. Remember, independent contractors constantly move from one company to the other, sometimes on a daily basis. Therefore, In order to protect your company from accidental or intentional exposure of privileged information, it’s important that you sign an Independent Contractor Non-Disclosure Agreement.

What Precisely is an Independent Contractor NDA?

An Independent Contractor Non-Disclosure Agreement also referred to as proprietary information agreement or secrecy agreement, is an agreement used by businesses or individuals to protect sensitive information, ideas, trade secrets, and transaction details from being exposed to unwanted parties during the course of a business deal or engagement.

Amongst a list of parties, a business wouldn’t want its confidential information to fall into includes the rival company. Usually, the Independent Contractor Non-Disclosure Agreement helps a business to operate in private hence maximizing its competitive advantage and chances to lose its information to competitors.

Free Templates

Professional Printable Independent Contractor Non-Disclosure Agreement Template 01 for Word Document

Professional Printable Independent Contractor Non-Disclosure Agreement Template 02 for Word Document

    What Type of Information Can an Independent Contractor NDA Protect?

    Well, the type of information protected by the Independent Contractor NDA often varies from one company to the other. However, the main/standard provision of this agreement include the following:

    • The company’s financial data
    • The list of customers, their addresses and previous business history
    • Business strategies developed by the organization
    • Product development by the organization
    • Research developments and other associated data
    • Sales and distribution data
    • The manufacturing processes and methods
    • Budget information
    • Patent rights and lastly
    • Intellectual property rights.

    While the above information represents the basics, companies planning to hire independent contractors should ensure their Independent Contractor NDA is tailored to protect all their confidential and private information.

    What to Look for in an Independent Contractor NDA

    • Usually, there are two types of Independent Contractor NDA: the unilateral and the mutual independent contractor NDA. The unilateral agreement is used when only one party is sharing confidential and sensitive information of their company to independent contractors. On the other hand, the mutual non-disclosure agreements are used when both parties agree unanimously to share confidential information.
    • In order to ensure proper understanding between you both parties, always provide adequate time for the potential independent contractor to review and sign in the confidentiality agreement.
    • As a golden rule of thumb, always sign two copies of the Independent Contractor NDA. Make sure you keep one copy and the other given to the contractor.
    • Make sure you sign the Independent Contractor NDA before any negotiations are done.
    • Remind your contractors that the materials he or she will be handling are private and confidential. This way, they will plan on ways to keep them safe from the public as much as possible.
    • It’s important to make arrangements on how your organization’s confidential information will be kept secret even after the contract terminates.

    How to Write an Independent Contractor NDA

    Writing an Independent Contractor NDA can sometimes be difficult and time-consuming. Therefore, if you want a ready-made Independent Contractor Non-Disclosure Agreement Template, you are at the right place. You can download one at our site for free.

    However, alongside the template, it’s equally important that you go through the following steps to know what’s you are dealing with better:

    Party information

    When creating an Independent Contractor NDA, the first step is always to include the information of the involved parties. The party can either be an individual or a business entity. As such, include the official names of the parties, their addresses, and official contacts.

    The length of the agreement

    Here, you will specify the duration with which you want the contract to last. In most cases, the independent contractors are entitled to keep their secrecy indefinitely. In other words, the contractor should keep the company’s confidential information secret long even after the termination of its business relations. However, some parties may opt for a shorter period.

    Disclaimer of warranties and arbitration provisions

    Here, you will go ahead and highlight whether or not the discloser will be liable for disclaiming all warranties associated with the confidential information. Also, you can provide exceptions to this effect.

    At the same time, you can highlight whether disputes will be handled in binding arbitration rather than through the court of law.

    Regulatory laws and other terms

    Before concluding the agreement, you need to specify which state laws adhere to your case. Plus, you can add any other terms and conditions that you would want to apply. Wrap your agreement with signatures from both parties.

    Frequently Asked Questions

    What is the purpose of the Independent Contractor Non-Disclosure Agreement?

    The Independent Contractor Non-Disclosure Agreement is a contract through which parties agree to keep confidential information free from public or unauthorized access. It, therefore, helps create a confidential relationship between the employer and the individual contractor.

    Is an Independent Contractor Non-Disclosure Agreement legally binding?

    Yes. The NDA is a legally binding document; hence any kind of violation can be subjected to a legal course of action.

    Is it necessary to sign the Independent Contractor NDA?

    No. usually, signing an independent contractor NDA isn’t a must. However, in order to formalize your working relationship and to protect your confidential information from leaking, an Independent Contractor NDA may suffice.

    About This Article

    Brandeis Tilleman
    Authored by:
    Trademark Law, Contract Review, Negotiation, and Drafting
    Brandeis Tilleman is a seasoned legal professional, boasting over 5 years of dedicated expertise in trademark law and contracts. His specialization lies in meticulously reviewing, negotiating, and drafting agreements that prioritize and safeguard his clients' interests. With a knack for creating tailored contracts that align with individual client needs, Brandeis has established a commendable track record in the legal domain. Whether it's refining an existing contract, negotiating fresh terms, or originating a detailed agreement, Brandeis's proficiency ensures that his clients are positioned for success.

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