An NDA (a Non-Disclosure Agreement, also called a confidentiality agreement) is a contract that protects confidential information shared between parties. It is one of the most common business documents, used whenever sensitive information changes hands. Here is a plain-English guide for England and Wales.
What an NDA does
An NDA obliges the party receiving confidential information to keep it secret and use it only for an agreed purpose. If they break that promise, the disclosing party can seek remedies, including damages and, importantly, an injunction to stop further disclosure.
It typically covers:
- a definition of what counts as confidential information (and exclusions, e.g. information already public);
- the permitted purpose for which it may be used;
- obligations of secrecy and limits on onward disclosure;
- return or destruction of information; and
- the duration of the obligations.
Unilateral vs mutual NDAs
- A unilateral (one-way) NDA is used where only one party will disclose confidential information (e.g. you share your idea with a potential supplier).
- A mutual (two-way) NDA is used where both parties will share confidential information (e.g. two businesses exploring a partnership or transaction).
Choose the form that matches the direction of information flow. There are also multi-party NDAs (e.g. a three-way mutual NDA).
When do you need one?
Use an NDA before sharing sensitive information, for example when:
- discussing a possible deal, partnership or investment;
- sharing business plans, financials, customer lists or pricing;
- disclosing know-how, designs, source code or product ideas to a developer, manufacturer or contractor;
- exploring an acquisition (it is usually the first document signed); or
- engaging freelancers, consultants or employees who will see confidential material.
If in doubt, an NDA is cheap insurance against your information being misused.
NDAs and trade secrets
Confidential information can also be protected as a trade secret. The Trade Secrets (Enforcement, etc.) Regulations 2018 sit alongside the common law of confidence and provide remedies for the unlawful acquisition, use or disclosure of qualifying trade secrets. A good NDA both defines the confidential information and supports any trade-secret protection.
Limits and good practice
- NDAs don't make information secret on their own, also control access and label confidential material.
- Keep the scope realistic, over-broad definitions can be harder to enforce.
- Set a sensible duration for the obligations.
- Don't misuse NDAs: an NDA cannot lawfully prevent protected disclosures (whistleblowing), reporting suspected crimes to the police, making reports to regulators, or obtaining legal advice. Confidentiality clauses used in harassment or discrimination contexts must be drafted carefully; they cannot remove those rights and cannot validly waive certain statutory rights, including future claims.
- Remedies: breach can lead to injunctions and damages, acknowledge in the NDA that damages may be inadequate so an injunction is appropriate.
Key takeaways
- An NDA / confidentiality agreement obliges the recipient to keep information secret and use it only for the agreed purpose.
- Use a unilateral NDA for one-way disclosure and a mutual NDA where both sides share information.
- Sign one before sharing sensitive information, deals, plans, know-how, or engaging contractors/staff.
- NDAs support trade-secret protection (Trade Secrets Regulations 2018) but cannot lawfully prevent protected disclosures, police/regulator reporting or obtaining legal advice; NDAs in harassment/discrimination contexts cannot remove those rights or waive future statutory claims.
Sources
- Common law of confidence and breach of confidence; remedies including injunctions and damages
- Trade Secrets (Enforcement, etc.) Regulations 2018 (protection of trade secrets)
- Limits on confidentiality clauses (whistleblowing protection under the Public Interest Disclosure Act 1998; restrictions on NDAs covering harassment/discrimination)
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.