We’re sure you’ll have heard of non-disclosure agreements (“NDAs”) – but do you know what they are, what they do, and when you need one? 

If not, this blog is for you.  

What is an NDA? 

An NDA is a legally binding agreement between two (or more) parties that places an obligation on the recipient(s) of the confidential information to keep that information secret.  

The aim is to prevent confidential information from falling into the wrong hands.   

Why do I need an NDA? 

To protect your confidential information. 

This is information that you want to keep secret from the wider public (but most likely your competitors).  

As a legally binding agreement, an NDA gives you much greater reassurance that your confidential information will be protected, as there could be legal consequences for the receiving party if they break their promise.  

These legal consequences might include: 

  • bringing a court action that would prevent them from disclosing information in certain circumstances; or  
  • bringing a claim against them for compensation if they do expose your confidential information. 

When do I need an NDA? 

If you’re speaking to a prospective client or supplier and need to share confidential information with them but you’re worried about the information being misused. 

Confidential information could be trade secrets, proprietary processes, client information and lists, marketing strategies, and any other valuable or sensitive information.  

Now, just because you want to keep some information secret, doesn’t make it confidential, as defined by law.   

An NDA sets out the type of information that is confidential, but it can’t protect all types of information.  

Information is not confidential if:  

  • it is already known to the public. 
  • the receiving party already had that information in their possession.  

An NDA will usually state that the obligations of confidentiality continue even after the relationship between the parties has come to an end.  

Sometimes it’s appropriate for this obligation to continue indefinitely, however, it is usually more appropriate to set durations based on how long the information is likely to remain valuable.  

Confidential obligations usually last between two and five years from the date of disclosure.  

Are you thinking about using an NDA in your business? Our team are highly experienced in creating bespoke agreements that can protect your most prized secrets.  

Click here to contact us.