Non-Disclosure Agreement (NDA): Protect Your Confidential Information

By the eLitigant Editorial Team · Reviewed for current forms, fees & procedure · How we check our guides

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Last reviewed: June 2026 · For use in England & Wales · eLitigant is a Community Interest Company (No. 16566612), not a law firm and does not give legal advice.

What a non-disclosure agreement is

A non-disclosure agreement (NDA) — also called a confidentiality agreement or confidentiality clause — is a contract in which one or more parties promise to keep specified information secret and to use it only for an agreed purpose. It is one of the most common ways a small business protects sensitive material before it shares that material with someone outside the organisation. There are two standard forms. A one-way (unilateral) NDA is used when only one party is disclosing confidential information — for example, an inventor showing a prototype to a potential manufacturer. A mutual (bilateral) NDA is used when both parties will share confidential information, such as two companies exploring a joint venture. The UK Intellectual Property Office publishes plain-language one-way and mutual NDA templates on GOV.UK for exactly these situations. An NDA is enforced as a matter of contract law. Confidential information is also protected under the common law of breach of confidence and, where the information amounts to a trade secret, under the Trade Secrets (Enforcement, etc.) Regulations 2018 (SI 2018/597). A well-drafted NDA sits on top of those protections and makes your expectations explicit and easier to enforce.

When and why to use one

You should consider an NDA whenever you are about to reveal information that has value because it is not publicly known. Common triggers for a small business include:

• Pitching an invention, product or business idea to a potential investor, buyer or manufacturer.
• Discussing a partnership, joint venture or merger where both sides exchange figures and plans.
• Engaging a freelancer, contractor or agency who will see customer data, pricing, source code or designs.
• Exploring the sale of all or part of your business, where a buyer needs access to your accounts.

The practical purpose is to allow a useful conversation to happen without giving away control of your information. Signing an NDA before disclosure also helps preserve the confidential — and potentially patentable — nature of an invention; once an idea is shared publicly without protection, that advantage can be lost. An NDA does not stop someone breaking their promise, but it gives you a clear contractual right to seek remedies such as an injunction or damages if they do.

What to put in it

A clear NDA usually covers the following points. Vague or “blanket” wording is a common cause of disputes, so each element should be specific:

• The parties. Full legal names and addresses of the discloser and the recipient.
• Definition of confidential information. Describe what is protected (for example, technical drawings, financial data, customer lists) and, ideally, mark documents “confidential”.
• The permitted purpose. State why the information is being shared — the recipient may use it only for that purpose.
• Obligations of the recipient. To keep the information secret, not to copy or share it, and to limit access to people who need to know.
• Exclusions. Information that is already public, already known to the recipient, or independently developed is normally carved out.
• Duration. How long confidentiality lasts — often two to five years, though genuine trade secrets may be protected for longer.
• Return or destruction. A requirement to return or destroy materials when the discussions end.
• Governing law. A statement that the agreement is governed by the law of England and Wales.

Common mistakes and important limits

The biggest pitfalls are drafting that is too wide or too vague to enforce, no permitted-purpose clause, no end date, and signing after the information has already been shared. Make sure the agreement is signed and dated before any confidential disclosure. There are also things an NDA cannot lawfully do. According to ACAS, a confidentiality agreement cannot stop someone from making a protected disclosure (“whistleblowing”), reporting a crime to the police, or — in the employment context — discussing pay for equal-pay purposes. NDAs should never be used to cover up misconduct, harassment or discrimination, and under the Employment Rights Bill the Government has legislated to make terms that silence workers about harassment or discrimination void. A commercial NDA between businesses is generally enforceable, but any clause that tries to gag a person from a protected disclosure will not be. This page is information, not legal advice. If your situation involves an employee, a settlement, or potential wrongdoing, the rules are stricter and you may wish to take independent advice.

FAQ

Is an NDA legally binding in England and Wales?
Yes — a properly drafted NDA is a binding contract, provided it meets the ordinary requirements of a contract and does not try to restrain a protected disclosure. Breach can give rise to an injunction or a claim for damages. One-way or mutual — which do I need?
Use a one-way NDA if only you are disclosing confidential information. Use a mutual NDA if both parties will share information with each other. GOV.UK provides templates for both. How long does an NDA last?
For as long as the agreement states. Many commercial NDAs set a fixed term of two to five years, but the obligation to protect a genuine trade secret can be drafted to continue for as long as the information remains secret.

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ONE-WAY NON-DISCLOSURE AGREEMENT

This Agreement is made on 19 June 2026 BETWEEN: (1) Marlow Craft Brewing Ltd, a company registered in England and Wales (company number 12345678) whose registered office is at 14 Riverside Works, Marlow, Buckinghamshire SL7 1AA (“the Discloser”); and (2) Thornbury Packaging Solutions Ltd, a company registered in England and Wales (company number 87654321) whose registered office is at Unit 9, Severnside Industrial Estate, Bristol BS35 4GG (“the Recipient”). 1. Purpose. The Discloser wishes to disclose certain confidential information to the Recipient for the sole purpose of enabling the Recipient to prepare a quotation for the design and supply of recyclable bottle packaging (“the Permitted Purpose”). 2. Confidential Information. “Confidential Information” means all information disclosed by the Discloser to the Recipient, whether in writing, orally or by any other means, relating to the Discloser’s products, recipes, processes, pricing, customers and business plans, including the bottle and label designs and the unit-cost projections shared on or after the date of this Agreement. 3. Obligations. The Recipient shall: (a) keep the Confidential Information secret and confidential; (b) use it only for the Permitted Purpose; (c) not disclose it to any third party without the Discloser’s prior written consent; and (d) restrict access to those of its employees who need to know it for the Permitted Purpose and who are bound by equivalent obligations. 4. Exclusions. The obligations in clause 3 do not apply to information that: (a) is or becomes publicly available other than through breach of this Agreement; (b) was lawfully in the Recipient’s possession before disclosure; or (c) is required to be disclosed by law, by a court, or to a regulator. 5. Duration. The obligations of confidentiality in this Agreement shall continue for a period of three (3) years from the date of disclosure. 6. Return of materials. On written request, the Recipient shall promptly return or securely destroy all materials containing Confidential Information. 7. Governing law. This Agreement and any dispute arising from it are governed by the law of England and Wales and subject to the exclusive jurisdiction of the courts of England and Wales. Signed for and on behalf of the Discloser:
Name: Helena Ashworth    Position: Director
Signature: ……………………    Date: ……………………

Signed for and on behalf of the Recipient:
Name: Daniel Okafor    Position: Director
Signature: ……………………    Date: ……………………

Contains public sector information licensed under the Open Government Licence v3.0.