NDA Template UK: Free Non-Disclosure Agreement Guide

When Do You Need an NDA?

An NDA (Non-Disclosure Agreement) is a legally binding contract that prevents one or both parties from sharing confidential information. They are essential before sharing sensitive business information with potential partners, investors, employees, or contractors.

• Before sharing business plans, financial data, or trade secrets with potential investors or partners
• When engaging freelancers or contractors who will access proprietary systems or client data
• During merger or acquisition discussions where both parties share commercially sensitive information
• When onboarding employees who will have access to confidential information or trade secrets

Key Clauses Every NDA Must Include

An enforceable NDA must clearly define what constitutes confidential information, the obligations of the receiving party, the permitted uses, and the duration of the obligations. Vague or overly broad NDAs are difficult to enforce and provide a false sense of security.

• Definition of confidential information: be specific about what is covered, not just 'all information disclosed'
• Obligations of the receiving party: not to disclose, not to use except for the permitted purpose, and to protect with reasonable care
• Exclusions: information that is already public, already known, independently developed, or required by law to be disclosed
• Duration: how long the confidentiality obligations last — typically 2 to 5 years, or indefinitely for trade secrets

Enforceability Under English Law

For an NDA to be enforceable under English law, it must be supported by consideration (something of value exchanged), have clear and reasonable terms, and not be so broad as to be an unreasonable restraint of trade. Courts will not enforce unreasonable NDAs.

• Consideration: in mutual NDAs, the exchange of confidential information provides consideration for both parties
• For one-way NDAs, ensure consideration exists — access to a business opportunity or potential contract is usually sufficient
• Remedies: include a clause acknowledging that damages may be inadequate and that injunctive relief may be sought
• Governing law: specify English and Welsh law (or Scots law) and the courts that will have jurisdiction

Key Takeaways

• NDAs are essential before sharing confidential business information with any external party.
• The definition of confidential information must be specific and the obligations clear for the NDA to be enforceable.
• Under English law, NDAs must be supported by consideration and have reasonable terms to be upheld by courts.