Non-Disclosure Agreement (NDA)

A Complete Guide to Non-Disclosure Agreements (NDA)

A Non-Disclosure Agreement (NDA), also known as a Confidentiality Agreement, is used to protect sensitive information shared between parties. It legally prevents the recipient from disclosing or misusing that information.

This guide explains the key types of NDAs, what to include, when you might need one, and how to create a legally binding agreement based on the laws of your chosen jurisdiction.

CONTENTS

What Is a Non-Disclosure Agreement?

An NDA is a binding contract where one or more parties agree not to disclose or misuse confidential information. It ensures sensitive data, trade secrets, or business strategies remain protected.

NDAs offer numerous advantages, such as:

Enhanced Information Security: By signing an NDA, you can trust that parties involved will not share your confidential information, keeping your trade secrets and business strategies secure.

Fostering Collaboration: NDAs enable the open exchange of ideas between partners, employees, or contractors without fear of unauthorised disclosure, promoting innovation and business growth.

Building Trust: Establishing an NDA demonstrates your commitment to protecting sensitive information, helping create trust between you and your partners, employees, or contractors.

Legal Safeguards: NDAs provide legal remedies, such as potential damages and injunctions, in case of a breach, preventing costly disputes and protecting your company's reputation.

Why Are NDAs Important?

NDAs help organisations and individuals protect valuable information and maintain a competitive advantage. They set clear expectations about confidentiality and provide a legal remedy if those terms are breached.

NDAs are important for:

• Protecting trade secrets during discussions with potential business partners.
• Safeguarding confidential client or customer information.
• Preserving the confidentiality of proprietary technologies or processes.
• Maintaining secrecy around financial information during investment negotiations.
• Preventing employees from disclosing sensitive company information to competitors.

What Are The Different Types of NDA?

NDAs can be structured in different ways depending on whether one or multiple parties are disclosing confidential information.

The main types of NDAs include:

• Unilateral NDA: One party discloses confidential information, and the other agrees to keep it secret.
• Mutual (Bilateral) NDA: Both parties share confidential information and agree not to disclose it.
• Multilateral NDA: Used when three or more parties are involved and share information under a single agreement.

What Should an NDA Include?

While NDAs can vary depending on the situation, most will include a few key clauses that define what’s protected and how it can be used.

A well-drafted NDA should include:

Parties involved: Clearly identify all individuals or organisations bound by the agreement.

Definition of confidential information: Specify what information is covered (documents, data, discussions, etc.).

Purpose of disclosure: Explain why the information is being shared.

Obligations of confidentiality: Outline how the information must be handled and protected.

Exclusions: Identify what information is not considered confidential (e.g. already public, independently developed).

Duration: State how long the confidentiality obligations last.

Consequences of breach: Define remedies or penalties if confidentiality is broken.

Jurisdiction: Confirm which country’s laws apply to the agreement.

When Do You Need an NDA?

In practice, NDAs are used whenever confidential information needs to be shared with third parties while maintaining legal protection.

Common situations where NDAs are used include:

• Sharing business plans or financial data with potential investors or partners.
• Discussing new products, inventions, or creative ideas with third parties.
• Providing confidential information to employees, freelancers, or contractors.
• Entering negotiations for mergers, acquisitions, or joint ventures.
• Collaborating with manufacturers, suppliers, or marketing agencies.

How to Create a Legally-binding NDA

The process for creating a valid NDA typically includes:

• Identify the parties: Clearly name everyone involved in the agreement.
• Define the confidential information: Specify exactly what’s protected.
• Set the terms and duration: Agree how long confidentiality will last and under what conditions.
• Add governing law and jurisdiction: Specify which country or state’s laws will apply to the Agreement based on where the parties operate.
• Sign and date the agreement: Both (or all) parties must sign for it to become legally binding.

How Much Does It Cost to Draft an NDA?

The cost of drafting an NDA will depend on how you create it and the level of legal review required.

Typical options include:

• Solicitor Drafted – £200–£600 depending on complexity.
• Generic Online Templates – often free, but risky if not tailored.
• Online Platforms – £30–£100 for solicitor-verified NDAs.

Non-Disclosure Agreement Template (Example)

Non-Disclosure Agreement (NDA)

The example below provides a simple overview of how a Non-Disclosure Agreement is typically structured and the type of clauses it usually contains. Actual content may vary depending on the parties involved, the nature of the information shared and your commercial requirements.

This Agreement is made on [date] between:

Disclosing Party:
Name: ____________________________
Address: __________________________

Receiving Party:
Name: ____________________________
Address: __________________________

The Receiving Party agrees to keep all Confidential Information shared by the Disclosing Party strictly confidential and to use it only for the purpose of [describe purpose - e.g., evaluation of a business relationship].

Confidential Information includes, but is not limited to:

- business plans
- product concepts
- financial information
- customer or supplier data
- technical information, designs, or intellectual property

This Agreement is governed by the laws of the jurisdiction selected by the parties.

Signed by the parties below to confirm acceptance of this Non-Disclosure Agreement:

Disclosing Party:
Signature: ________________________

Receiving Party:
Signature: ________________________

Robot Lawyer provides a solicitor-verified NDA template that is clear, enforceable, and compliant with UK law. It can be adapted for one-way or mutual use, making it suitable for a wide range of business scenarios.

Unlike free downloads, our template is kept up to date with legal requirements and designed to stand up if challenged.

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Non-Disclosure Agreement FAQs

What makes an NDA legally binding?

Proper drafting, clear definitions, and valid signatures from all parties.

How long does an NDA last?

Typically 2–5 years, but can be longer if appropriate (e.g. trade secrets).

Can an NDA cover future information?

Yes, if the agreement specifies that future disclosures are included.

What happens if someone breaks an NDA?

The disclosing party can take legal action for damages or seek an injunction to stop further breaches.

Are NDAs enforceable in the UK?

Yes, provided the terms are reasonable and not overly restrictive.

Do employees need separate NDAs?

Employment contracts usually include confidentiality clauses, but a standalone NDA may be used for specific projects or sensitive roles.

Create Your NDA Online

Need to protect confidential information? Robot Lawyer makes it quick and affordable to create a professional NDA.

How it works:

1. Select Create Document ➝ below and start the questionnaire.
2. Answer a few quick questions about your agreement.
3. Instantly receive a solicitor-verified NDA template.
4. Sign and start sharing information securely.

Non-Disclosure Agreement (NDA)

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