Non-Disclosure Agreements – Overview

A non-disclosure agreement (NDA) is a legal contract which is designed to protect confidential information from being disclosed. An NDA is usually used in commercial settings before confidential information is disclosed to another party.

There are two difference types of NDAs; one way or mutual. A one way NDA would be required when only one of the parties are disclosing confidential information whereas a mutual NDA would be required when both parties are disclosing confidential information.

Even if an NDA is in place this still may not protect the confidential information from being used or entering into the public domain as there is always a risk that one party may breach the agreement. The party whose information has been disclosed may then seek to rectify the breach in a form of a remedy.

Provided NDAs have been drafted and executed correctly they will be legally binding, however there has been heavy scrutiny over the circumstances of which the term ‘confidential information’ may be confined to.

Current news on NDA

The use of NDA’s has been abused over the years as companies have pressured employees into entering into the agreement in order to cover up criminal activities or potential allegations against their colleagues.

The Government have introduced various changes to NDAs in order to protect individuals from being exploited. One of the proposed changes is that NDAs cannot be used as shield to protect employers from allegations of sexual abuse or other criminal conduct.

If there is not an NDA in place before confidential information is disclosed, the information may not be protected unless there is a special relationship where a duty of confidentiality arises for example a solicitor has a confidentiality obligation to their client. However, not all professional advisors are subject to a confidentiality provision, therefore it is important to have an NDA in place before disclosing information which may required protection.

What to consider when drafting an NDA

All parties considering entering an NDA should consider the following: what information is subject to the NDA, what are the consequences of a breach, what is considered a breach and is there any consideration provided for entering an NDA.

To find out more information on NDAs or to find out how they may be able to protect your information please contact our team.

The information given on our website and blog is of a general nature and may not be relied upon as legal advice as every case will be different to some extent. We would need information regarding specific circumstances and requirements in order to advise individual clients.