When you share your product formulas, designs, or business plans with a contract manufacturer, you expose sensitive information that defines your competitive advantage. A Non-Disclosure Agreement (NDA) is your primary legal tool for protecting this information.
What is an NDA?
A Non-Disclosure Agreement (NDA), also called a confidentiality agreement, is a legal contract that prevents one or both parties from sharing confidential information with third parties. In contract manufacturing, the NDA typically runs from before negotiations begin until several years after the business relationship ends.
What to Include in a Manufacturing NDA
Definition of Confidential Information
Clearly define what counts as confidential: product formulas, specifications, technical drawings, business plans, customer lists, pricing, and production processes.
Scope of Obligation
Specify that the manufacturer cannot share, copy, reverse engineer, or use your information for any purpose other than manufacturing your product.
Duration
Typically 3-5 years after the agreement ends. For trade secrets, consider indefinite protection clauses.
Permitted Disclosures
Define situations where limited disclosure is permitted (e.g., subcontractors who also sign NDAs) and require the manufacturer to get written approval before sharing with any third party.
Remedies for Breach
Specify liquidated damages for breach of confidentiality and the right to seek injunctive relief without posting bond.
Practical Tips
- Always sign the NDA before sharing any proprietary information
- Have the NDA reviewed by a lawyer familiar with Turkish commercial law
- Keep records of what information was shared and when
- Include the NDA provisions within the main manufacturing contract as well
- Consider registering key IP (trademarks, patents) for additional protection
See also How to Prepare a Manufacturing Contract and Legal Issues and Solutions.