NDAs: when you need one and what it should include

What an NDA does

A non-disclosure agreement, also called a confidentiality agreement, is a contract in which one or both parties promise to keep specified information confidential and to use it only for an agreed purpose. It is normally signed before a business shares information it would not want a competitor, customer or the public to have, such as financial figures during a sale or investment, product designs before launch, customer lists, pricing, or the details of a proposed deal.

An NDA gives you a right to take action if the other side breaches it, and it does three useful things. It makes the recipient's obligations clear, including what they may do with the information and who they may share it with. It gives you contractual remedies, including an injunction to stop further use or disclosure, and damages or an account of the profits made from the breach. It also creates a record that the information was shared in confidence, which helps if you later need to prove that.

Some protection exists without an NDA. The courts can protect confidential information that was shared in circumstances where the recipient knew or ought to have known it was confidential, and the Trade Secrets (Enforcement, etc.) Regulations 2018 protect information that is secret, has commercial value because it is secret, and has been subject to reasonable steps to keep it secret. Relying on those rules means proving that the information and the circumstances qualified, which is harder than pointing to a signed agreement.

When you need one

Use an NDA before sharing information that would cause real harm if it were used or disclosed outside the purpose for which you are sharing it. Common situations are:

• selling a business or raising investment, where buyers and investors see accounts, contracts and customer data;
• discussions with a manufacturer, developer or supplier about a product that has not launched;
• exploring a joint venture, licence or distribution arrangement;
• bringing in consultants or contractors who will see sensitive information and are not bound by an employment contract;
• discussing an invention before a patent application has been filed.

The last situation has a specific legal consequence. An invention can only be patented if it is new, and government guidance warns that you may not be able to patent an invention once it becomes public knowledge, so anyone discussing an invention with someone other than a patent attorney may need an NDA first. Employees are usually bound by confidentiality terms in their employment contracts rather than a separate NDA; our guide to restrictive covenants covers what happens when they leave.

An NDA adds little where the information is already public, or where you would not mind a competitor seeing it. Some investors and large companies decline to sign NDAs at an early stage. In that case, share a summary that does not reveal the valuable detail, and ask for an NDA before moving to detailed discussions. Public authorities, including universities, are subject to the Freedom of Information Act 2000, and the Intellectual Property Office's guidance recommends that an NDA with a public authority deals with requests made under that Act.

One-way or mutual

A one-way NDA protects information disclosed by one party, for example a business sharing its accounts with a potential buyer. A mutual NDA protects information flowing in both directions, which suits joint ventures and collaborations. Use the version that fits the facts. The Intellectual Property Office's guidance notes that a one-way NDA may need to be signed as a deed to be enforceable, says that this is easy to do, and advises against turning what should be a one-way agreement into an artificial mutual one.

Whichever version you use, make sure the person signing for the other side has authority to give the promises in it, such as a director of the recipient company or a senior officer of an institution.

The terms that matter

Most NDAs look alike, but a handful of clauses decide whether a particular one protects you.

What counts as confidential information

The definition should cover everything you will share, including information given verbally, in meetings or on site visits, and not only documents marked as confidential. If the NDA protects only marked documents, keep a written record of what you disclosed verbally and when. The Intellectual Property Office also suggests asking people at a meeting to sign a paper copy of a presentation or technical drawing as proof that they have seen it.

The exclusions

NDAs normally exclude information that is or becomes public other than through a breach, information the recipient already had or develops independently, and information that must be disclosed by law or to a regulator. Those exclusions are reasonable, but check that the recipient has to show an exclusion applies, and that a legal requirement to disclose comes with an obligation to tell you first where the law allows.

Purpose and permitted recipients

The NDA should state precisely what the information may be used for, such as evaluating a proposed purchase, and prohibit any other use. The Intellectual Property Office points out that a permitted purpose can be widened later but cannot be narrowed. The recipient will usually need to share information with its employees and professional advisers, so the NDA should limit this to people who need to know, require them to be told the information is confidential, and make the recipient responsible for any breach by them.

Duration, return and destruction

The Intellectual Property Office's guidance notes that confidentiality obligations are commonly limited to three or five years, after which the recipient can use and disclose the information. Some information, such as know-how that cannot be patented, customer lists and personal information, may need to be kept confidential indefinitely. The NDA should also require the recipient to return or destroy the information when discussions end, with a practical exception for automatic electronic back-ups that remain confidential.

Law and jurisdiction

If either party is outside England and Wales, state which law governs the agreement and which courts can hear a dispute. The Intellectual Property Office warns against giving the courts of one country exclusive jurisdiction, because you may need to enforce the NDA in the country where an unauthorised disclosure takes place.

Before you sign someone else's NDA

An NDA drafted by the other side is written to protect them. When you are receiving information, read it as carefully as any other contract, because you are taking on obligations that can last for years and apply across your whole business. Points to check include:

• a definition of confidential information so wide that it covers things you already know or could develop yourself;
• restrictions on working with the other side's competitors, or on approaching its customers or staff, which go beyond confidentiality;
• indemnities, or fixed sums payable on a breach;
• obligations your business cannot practically meet, such as tracking every copy of every document;
• an obligation of confidentiality with no end date for information that has no lasting value.

Before signing, work out who in your business will see the information and how you will keep it separate from your own development work. If you later develop something similar, records showing that it was developed independently will help you answer any allegation of misuse.

What an NDA cannot stop

Some disclosures cannot be prevented by a confidentiality clause, whatever it says. A provision in an agreement between a worker and their employer is void so far as it tries to stop the worker making a protected disclosure under whistleblowing law (Employment Rights Act 1996, section 43J).

Since 1 October 2025, section 17 of the Victims and Prisoners Act 2024 has made a provision in any agreement void so far as it tries to stop a victim of crime, or someone who reasonably believes they are one, disclosing information about the conduct to the police or other law enforcement bodies, a qualified lawyer, a regulated professional or victim support service from whom they are seeking support, the regulator of a regulated profession, or their partner, parent or child for support. The protection does not extend to disclosures made mainly to put the information into the public domain.

An NDA also cannot protect information once it has become public through no fault of the recipient, and it does not override a court order or a regulator's legal power to require information. A clause that tries to prevent disclosures the law protects is unenforceable to that extent.

If an NDA is breached

Act quickly if you suspect a breach. If confidential information is being used or disclosed, the most valuable remedy is usually an injunction to stop it, and a court considering an urgent application will want to see that you acted promptly. Preserve the evidence of what was disclosed, to whom and when, and of the misuse, then take advice on a letter before claim asking the other side to stop, return the information and give written undertakings.

If the matter goes to court, you can ask for an interim injunction before trial, and at trial for a final injunction, damages or an account of the profits made from the misuse, and an order for the material to be delivered up or destroyed. A claim for breach of contract must generally be brought within six years (Limitation Act 1980, section 5), and a claim under the Trade Secrets Regulations also has a six-year limitation period. Proving the loss caused by a breach can be difficult, so early action to stop the misuse is usually the priority. Our guide to commercial disputes covers the steps before court.

Keeping information confidential in practice

An NDA works best as one part of a wider approach. Share information in stages, starting with what the other side needs to decide whether to go further. Mark documents as confidential, use a data room that records who viewed what, and keep a note of what was said at meetings. Limit copies and remove access when discussions end. Make sure your own employees and contractors are bound by confidentiality terms, and register what can be registered, such as trade marks and patents, because registered rights do not depend on keeping anything secret.

We can prepare a one-way or mutual NDA for your situation, review an NDA you have been asked to sign, or advise if you think your information has been misused. We agree the scope and cost in writing before we start.

Frequently asked questions

Is an NDA legally binding?

Yes, if it is properly made and signed by someone with authority. An NDA is a contract, so a breach entitles the other party to seek remedies such as an injunction, damages or an account of the profits made. A one-way NDA may need to be signed as a deed to be enforceable. Terms that go further than protecting confidential information, such as restrictions on competing, can be harder to enforce, and no NDA can stop the disclosures the law protects, such as whistleblowing.

How long should an NDA last?

It should last as long as the information has value. Intellectual Property Office guidance notes that confidentiality periods of three or five years are common, after which the recipient can use and disclose the information. Information with lasting value, such as customer lists, personal information and know-how that cannot be patented, may justify a longer or indefinite obligation. Once information becomes public through no fault of the recipient, the NDA can no longer protect it.

What can I do if someone breaks an NDA?

You can ask the court for an injunction to stop further use or disclosure and claim damages or the profits made from the breach, but you need to act quickly. Collect evidence of what was shared and how it has been misused, then take advice on a letter asking the other side to stop, return the information and give undertakings. Delay can make an urgent injunction harder to obtain. A claim for breach of contract must generally be brought within six years.

Can an NDA stop someone reporting wrongdoing?

No, not in the situations the law protects. A clause in an agreement between a worker and their employer is void so far as it tries to prevent a protected disclosure under whistleblowing law. Since 1 October 2025, a clause in any agreement is also void so far as it tries to stop a victim of crime reporting it to the police, taking legal advice, seeking support or cooperating with the regulator of a regulated profession. That second protection does not cover disclosures made mainly to put information into the public domain.

Do I need an NDA before pitching to an investor?

It depends on what you plan to share. Some investors decline to sign NDAs at an early stage, so a first pitch should explain what the business does and the opportunity without revealing detail that would harm you if it were used elsewhere. Before sharing detailed financial information, technical know-how or customer data, ask for an NDA. If you are discussing an invention that has not yet been the subject of a patent application, take advice before disclosing it to anyone.

Should an NDA be one-way or mutual?

Use a one-way NDA when only one party is sharing confidential information, such as a seller giving a buyer access to its accounts, and a mutual NDA when both parties are sharing, such as in a joint venture. Intellectual Property Office guidance notes that a one-way NDA may need to be signed as a deed to be enforceable and advises against making a one-way arrangement artificially mutual. Whichever you use, the definition, purpose and duration clauses matter more than the label.

Can I use a free NDA template?

A template can be a reasonable starting point for simple, low-risk discussions, and the Intellectual Property Office publishes example one-way and mutual NDAs. Check that it suits your situation: the definition should cover how you will share information, the purpose should be specific, the duration should fit the information, and the governing law and signatories should be right. Where the information is valuable or the other party is a competitor, an agreement adapted to the transaction gives better protection.

Sources & further reading

• GOV.UK — Non-disclosure agreements (Intellectual Property Office)
• legislation.gov.uk — Trade Secrets (Enforcement, etc.) Regulations 2018
• legislation.gov.uk — Victims and Prisoners Act 2024, section 17
• legislation.gov.uk — Employment Rights Act 1996, section 43J
• GOV.UK — Apply for a patent
• legislation.gov.uk — Limitation Act 1980, section 5

This article is general information, not legal advice. The law changes and depends on your circumstances — always take advice on your specific situation before acting. Last reviewed 17 September 2026. AD Solicitors is a trading name of AD Solicitors Limited, a recognised body regulated by the SRA (no. 8011228).