An essential guide to Non-Disclosure Agreements

NDA

An essential guide to Non-Disclosure Agreements (NDAs), their key terms and impact. As a business, do you know how to share your ideas and information in confidence?

1. What is an Non-Disclosure Agreements?

A non-disclosure agreement (also called a confidentiality agreement) is a legally binding contract that can be used to protect information so that it can not be used by a third party for that party’s benefit.

2. When should you use an NDA?

When you need to share information but want it to be kept private and want to regulate how the information can be used. Asking a party to a sign an NDA flags that your information is confidential and should be treated as such.

3. What is confidential information?

This will be specific to your business. Make sure you clearly define what is included as “confidential” and how and why this is going to be disclosed.

4. Are you and the other party disclosing confidential information to each other?

This will determine whether the NDA is mutual or one-sided. Think carefully about this. If the other party isn’t sharing anything confidential with you then it would not be mutual.

5. Who are the parties to the agreement?

Check the names of the parties carefully. If the other party is a group company you may find your confidential information being shared with a larger organisation than you originally anticipated.

6. Why are you disclosing confidential information?

This should set out what the other party can do with your confidential information. It will be the “permitted purpose”. Clearly define this and make it as restrictive as possible so that your information cannot be used for purposes that you weren’t anticipating.

7. Confidentiality obligations

What security obligations do you want the other party to comply with? Can they share your information with their suppliers or advisers? If you are happy for them to do so you might want to insist that those parties enter into a similar NDA.

8. What is the time limit on the NDA?

This will depend upon a number of factors, for example how long are your discussions likely to take. If you are collaborating on a product this could be a number of years.

9. Do you want to prevent the other party from competing with your business and/or poaching your employees?

These may not be enforceable even if you have them in your NDA. You will need to make sure they are reasonable and there is a justifiable business reason for having them in there.

10. Who is signing the NDA on behalf of the other party?

Make sure that the person signing the document has the authority to sign this on behalf of the other party (especially if Group Companies are included!)


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Whether you need help preparing an NDA or are looking for other ways to keep your information protected – we can help!

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