What is a non-disclosure agreement (NDA)?

A non-disclosure agreement (NDA) is a contract that regulates how confidential information may be used and disclosed, creating a legally binding duty of confidentiality between the parties.

What should a confidentiality agreement include?

Key elements typically include a clear definition of confidential information, the agreement term and any exceptions, rules for permitted use and disclosure, and consequences in the event of breach of contract.

Confidentiality agreement (non disclosure agreement)

Q: When does a non-disclosure agreement become relevant?

An NDA becomes relevant when sensitive information needs to be shared in recruitment, consultancy engagements, collaborations, due diligence, product development or commercial negotiations.

We draft confidentiality agreements and clarify information protection, negotiation and risk management

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Glossary
Confidentiality agreement (non disclosure agreement)

Explained – what is a non disclosure agreement?

A non disclosure agreement (abbreviated NDA in English) is a contract between two or more parties that governs how confidential information may be used. Its purpose is to ensure a duty of confidentiality and the protection of trade secrets against unauthorised access or disclosure. The contract may be unilateral NDA, where only one party owes confidentiality, or a mutual NDA, where both parties are bound. NDA agreement documents are common in commercial law, employment contexts and collaborations between companies.

When does a non disclosure agreement become relevant?

An NDA agreement becomes relevant when sensitive information needs to be shared in a business or employment setting. Typical scenarios include recruitment, collaboration between companies, or when appointing a consultant. Non disclosure agreements are also frequently used in due diligence, product development and negotiations on commercial contracts.

Business professionals shaking hands over a signed non-disclosure agreement (NDA), confirming a confidential business relationship and protection of sensitive information.

Key considerations for a non disclosure agreement

For a confidentiality agreement to be effective, consider the following points when drafting it.

Define clearly the definition of confidential information.
State the NDA validity period and any exceptions (for example, an NDA duration clause).
Decide whether the NDA agreement should be unilateral or mutual.
Set rules on how confidential information may be used and shared.
Specify consequences in the event of breach of contract.
Ensure the agreement complies with applicable law.
Use a contract lawyer for support with drafting, review or negotiation.

A clear and properly drafted confidentiality undertaking reduces the risk of disputes and unauthorised disclosure of sensitive information.

Non-Disclosure Agreement

Why a non disclosure agreement matters

An NDA is important because it creates a legally binding framework that protects confidential information. This is essential to preserve competitive advantages, trade secrets and trust between parties.

For companies, a confidentiality agreement for the protection of trade secrets may be a prerequisite for sharing strategic information during collaboration. This is particularly true for an NDA between companies where development plans, client lists or technical solutions are shared. The agreement provides assurance for both parties.

From a business perspective, a well-drafted non disclosure agreement builds long-term relationships based on trust. It signals seriousness and accountability, strengthening the company’s reputation and reducing the risk of costly disputes.

A duty of confidentiality may be statutory, for example under public access and secrecy rules, or arise from contract or professional ethics. A confidentiality agreement is a contract that creates a corresponding obligation between parties.

A non disclosure agreement should be signed when sensitive information is shared in connection with business negotiations, recruitment, consultancy engagements or projects where trade secrets are exposed. This is a typical answer to the question of when to use an NDA.

A unilateral NDA means that only one party is bound by confidentiality. It is often used where one party discloses information to another without receiving confidential information in return.

To be effective, an NDA should always contain certain core elements:

Definition of confidential information
Agreement duration (NDA validity period)
Rules for use and disclosure
Consequences in the event of breach of contract

Yes, an NDA between companies is common in collaborations, joint projects or negotiations. It ensures both parties can exchange information with a reduced risk of unauthorised disclosure and can be prepared with the help of a contracts lawyer.

When drafting an NDA agreement for a consultant, first identify which confidential information must be protected and for how long the agreement should apply. It is also important to regulate permitted uses and to address the specific risks in the consultancy assignment. A standard NDA template is often used, but best practice is to tailor the contract to the situation:

Map the confidential information
Set out the parties and the scope
Fix the term and any NDA duration clause
Specify sanctions for breach
Check legality under applicable law

Purpose of non disclosure agreement: to safeguard confidential information, allocate risk and provide remedies for misuse across the life of the contract.