A non-disclosure agreement (NDA) legally obliges the party or parties who sign it to keep specified information confidential, and sets out what can happen if that confidentiality is breached.
What it means
NDAs can be one-way, where only one party discloses confidential information, or mutual, where both sides share and protect each other's information. They are common wherever sensitive business, financial or personal information needs to be shared before a deal or employment relationship is finalised.
Where it fits in
Confidentiality clauses are often built directly into an employment contract rather than signed as a separate NDA, and frequently sit alongside a restraint of trade clause restricting what an employee can do with that information after they leave.
Key rules
- Legally binds signatories to keep specified information confidential.
- Can be one-way or mutual.
- Often embedded in an employment contract rather than signed separately.
- Commonly paired with a restraint of trade clause.
