In today’s competitive business environment, Non-Disclosure Agreements (NDAs) are essential tools for protecting sensitive and confidential information. Whether you’re negotiating a potential partnership, sharing trade secrets, or onboarding a new employee, NDAs help safeguard your commercial interests. But despite their widespread use, NDAs are often misunderstood and misused.
Key elements of an Non-Disclosure Agreements
A well-drafted NDA should include:
Definition of confidential information
You need to clearly outline what information is protected, this can include technical data, financial records, customer lists, business plans, intellectual property or proprietary processes. This is the foundation of any NDA. It defines what information is considered confidential and protected under the agreement. If the definition is too vague, it may be unenforceable. If it’s too broad, it may be challenged as unreasonable or trying to protect information that is in fact publicly available. For best practice use clear categories and specify whether oral disclosures are included.
Example: A tech startup might define confidential information as “any source code, algorithms, or product roadmaps disclosed.”
Obligations of the receiving party
Specify how the recipient must handle the information. Standard obligations include:
- Keeping the information secure;
- Not disclosing it to third parties; and
- Not using it for any purpose other than a specified purpose.
For example: A manufacturer sharing product specifications with a supplier may require the supplier to store the data securely and not use it to develop competing products.
Duration of confidentiality
NDAs should state how long the confidentiality obligation lasts. This can range from a few years to indefinite, depending on the nature of the information. Without a clear duration, courts may interpret the obligation as lasting only a “reasonable” time. Common durations used are 2–10 years, or indefinite for trade secrets.
For example: An NDA for a short-term project might specify a 3-year confidentiality period, while one involving proprietary technology might last indefinitely.
Permitted disclosures
Include exceptions for disclosures, for example:
- Disclosure required by law or court order;
- Disclosure to employees or contractors under similar confidentiality obligations;
- Disclosure to professional advisers (e.g., lawyers, accountants) under similar confidentiality obligations; or
- Information already in the public domain.
Without these permitted disclosures, you risk being in breach of an NDA if you disclose confidential information. Those you are permitted to disclose to should also be subject to confidentiality obligations, typically no less onerous obligations than those set out in the NDA are required.
For example: A company may allow its auditors to review confidential contracts as part of a financial audit, provided the auditors are bound by confidentiality.
Consequences of breach
Without clear remedies, enforcement of an NDA becomes difficult. Remedies may include:
- Injunctive relief (to stop further disclosure);
- Damages (compensation for losses); and/or
- Termination of the agreement or business relationship.
For example: If a former employee leaks client data, the NDA may allow the company to seek an injunction and claim financial damages.
Common pitfalls to avoid
Despite their simplicity, NDAs can be legally ineffective if poorly drafted. Common mistakes include:
- Overly broad definitions that make enforcement difficult;
- Failure to tailor the NDA to the specific transaction or relationship;
- Omitting jurisdiction clauses, which can complicate enforcement;
- Assuming NDAs are enforceable in all circumstances – there are laws the restrict the use of NDAs, for example The Victims and Prisoners Act 2024, under which any NDA signed on or after 1 October 2025 will be unenforceable if it tries to stop a victim of crime, or someone who reasonably believes they are, from sharing information with certain people for support or justice-related purposes.
How Moore Barlow can help
At Moore Barlow, we understand that NDAs are more than just paperwork, they’re strategic tools that protect your business. Our Commercial and Technology lawyers can:
- Draft bespoke NDAs tailored to your sector and risk profile;
- Advise on enforcement and breach scenarios;
- Support negotiations where confidentiality is a key concern.
Whether you’re a startup, SME, or large enterprise, we’ll help you protect your business and get the most out of an NDA.
