MAKE YOUR FREE Non Disclosure Agreement (NDA)
What we'll cover
What is a Non Disclosure Agreement?
A Non Disclosure Agreement is a legally binding and enforceable contract that offers protection when two or more parties will be disclosing confidential information to each other. Non Disclosure Agreements are typically used when businesses exchange commercially sensitive information. An NDA creates a confidential relationship between the parties exchanging information, where neither party is able to share the other’s confidential information.
NDAs offer protection when two businesses want to share information with each other but need to ensure the information goes no further. This mutual NDA allows you to get to know each other better so you can decide whether to enter into a longer-term deal or partnership.
When should I use an NDA?
Use this NDA template:
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when you want to exchange confidential information with another party (a business or an individual)
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to impress upon the other party the value of the confidential information
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to impose requirements about the protection of your confidential information
Sample Non Disclosure Agreement
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NON-DISCLOSURE AGREEMENT
This Agreement is made as on the date of last signature below.
Between
Meanings
- These words and phrases have defined meanings;
Agreement this confidentiality agreement and any amendments from time to time; Confidential Information any information disclosed by or on behalf of a Disclosing Party (as defined below) to a Receiving Party (as defined below) during the Term that at the time of disclosure (whether in writing, electronic or digital form, verbally or by inspection of documents, computer systems or sites or pursuant to discussions or by any other means or other forms and whether directly or indirectly) is confidential in nature or may reasonably be considered to be commercially sensitive, and which relates to the business and affairs of the Disclosing Party including but not limited to: (a) all Intellectual Property Rights of the Disclosing Party (b) all analyses, compilations, studies and other documents prepared by the Receiving Party which contain or otherwise reflect or are generated from the information referred to above; Disclosing Party either Party to this Agreement when disclosing Confidential Information to the other Party; Effective Date ; Intellectual Property Rights all trade and service marks, registered and unregistered design rights, all design right applications, patents, copyrights, database rights and rights in know-how, confidential information and inventions and other intellectual property rights of a similar or corresponding character whenever and however arising and all renewals and extensions of such rights which may now or in the future subsist; Permitted Purpose ; Receiving Party either Party to this Agreement when receiving Confidential Information from the other Party; Term the term of this Agreement; and Working Day any day other than a Saturday, Sunday or bank holiday in England and Wales. - In this Agreement, unless the context requires a different interpretation
- the singular includes the plural and vice versa;
- references to sub-clauses, clauses, schedules or appendices are to sub-clauses, clauses, schedules or appendices of this Agreement;
- a reference to a person includes firms, companies, government entities, trusts and partnerships;
- "including" is understood to mean 'including without limitation';
- reference to any statutory provision includes any modification or amendment of it;
- the headings and sub-headings do not form part of this Agreement.
Obligations in Relation to Confidential Information
- In consideration of the disclosure to it of Confidential Information by the Disclosing Party the Receiving Party agrees and undertakes that it will, subject to the provisions of Clause :
- keep all Confidential Information strictly confidential and will not disclose any part of it to any other person without the Disclosing Party's prior written consent;
- not use any part or the whole of the Confidential Information directly or indirectly for any purposes other than the Permitted Purpose without the express written consent of the Disclosing Party;
- use the same degree of care to protect the Confidential Information as it uses to protect its own confidential information, being at least a reasonable degree of care.
Permitted Disclosures
- A Receiving Party may disclose Confidential Information to its employees, professional advisers, agents and sub-contractors (each a "Permitted Disclosee") provided that the Permitted Disclosee (i) has a need to have access to the Confidential Information for the performance of its work in relation to the Permitted Purpose and (ii) is bound by a written agreement or professional obligation to protect the confidentiality of the Confidential Information which it receives from the Receiving Party.
Ownership of Confidential Information
- The Confidential Information and all Intellectual Property Rights contained in it will remain the property of the Disclosing Party and the disclosure of the Confidential Information will not give the Receiving Party any rights in any part of the Confidential Information.
Exceptions to Non-Disclosure and Confidentiality
- The obligations of confidentiality set out in this Agreement will not apply to any information which:
- is already known to, or in the possession of, the Receiving Party at the time of its disclosure by the Disclosing Party, and is not subject to any obligation of confidentiality;
- is, or becomes through no wrongful act or default of the Receiving Party, public knowledge;
- is received from a third party in circumstances where the Receiving Party has no reason to believe that there has been a breach of a duty of confidence;
- is required to be disclosed by law or the rules of any court or other body of competent jurisdiction; any governmental or regulatory body or any recognised investment exchange.
Term and Return of Confidential Information
- This Agreement will come into force on the Effective Date and will continue in force until the anniversary of this Agreement, unless terminated earlier at any time by either Party giving written notice of termination to the other.
- On termination of this Agreement or on demand by the Disclosing Party, the Receiving Party will immediately stop using all Confidential Information, return all Confidential Information to the Disclosing Party and provide a certificate to the Disclosing Party certifying that no copies of the Confidential Information have been made or retained.
Remedies
- Both Parties acknowledge that damages alone would not constitute an adequate remedy for any breach by the Receiving Party of this Agreement.
- Each Party shall, without prejudice to any and all other rights and remedies which may be available, be entitled to the remedies of injunction, specific performance and other equitable relief for any breach of this Agreement by the other Party actual or threatened.
Limitation of Liability
- Each Party warrants to the other that it has the legal right and authority to enter into and perform its obligations under this Agreement.
- Subject to the above, neither Party, nor any of their respective employees, officers, agents, subsidiaries or any other associated third parties associated accepts any responsibility or liability for, or makes any representation or warranty, express or implied, that the Confidential Information disclosed by either Party is accurate or complete.
Circumstances Beyond the Control of the Parties
- A Party to this Agreement will not be liable for any failure or delay in performing its obligations where such failure or delay results from any cause that is beyond the reasonable control of that Party. In these circumstances, the affected party must notify the other party or parties as soon as reasonably practicable. The notified Party or Parties may suspend or terminate the Agreement on notice, taking effect immediately upon delivery of the notice.
Entire Agreement
- This Agreement contains the whole agreement between the Parties relating to its subject matter and supersedes all prior discussions, arrangements or agreements that might have taken place in relation to the Agreement. Nothing in this clause limits or excludes any liability for fraud or fraudulent misrepresentation.
General
- No Party may assign, transfer, sub-contract, or in any other manner make over to any third party the benefit and/or burden of this Agreement without the prior written consent of the other Party or parties, such consent not to be unreasonably withheld.
- No variation to this Agreement will be valid or binding unless it is recorded in writing and signed by or on behalf of the Parties.
- The Contracts (Rights of Third Parties) Act 1999 will not apply to this Agreement and no third Party will have any right to enforce or rely on any provision of this Agreement.
- Unless otherwise agreed, no delay, act or omission by a Party in exercising any right or remedy will be deemed a waiver of that, or any other, right or remedy.
- Provisions which by their intent or terms are meant to survive the termination of this Agreement will do so.
- If any court or competent authority finds that any provision of this Agreement (or part of any provision) is invalid, illegal or unenforceable, that provision or part-provision will, to the extent required, be deemed to be deleted, and the validity and enforceability of the other provisions of this Agreement will not be affected.
- Any notice to be delivered under this Agreement must be in writing and delivered by pre-paid first class post to or left by hand delivery at the registered address or place of business of the notified Party, or sent by email to the other Party's main business email address as notified to the sending Party. Notices:
- sent by post will be deemed to have been received, where posted from and to addresses in the United Kingdom, on the second Working Day and where posted from or to addresses outside the United Kingdom, on the tenth Working Day following the date of posting;
- delivered by hand will be deemed to have been received at the time the notice is left at the proper address;
- sent by email will be deemed to have been received on the next Working Day after sending.
- This clause does not apply to the service of any proceedings or other documents in any legal action.
Governing Law and Jurisdiction
- This Agreement shall be governed by and interpreted according to the law of England and Wales and all disputes arising under the Agreement (including non-contractual disputes or claims) shall be subject to the exclusive jurisdiction of the English and Welsh courts.
The parties have signed this Agreement on the date(s) below:
About Non Disclosure Agreements
Learn more about making your NDA
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How to make a Non Disclosure Agreement
Making an NDA online is simple. Just answer a few questions and Rocket Lawyer will build your document for you. When you have all of the details prepared in advance, making your document is a quick and easy process.
To make your NDA, you will need the following information:
Party details
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What are your details?
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What are the details of the other party?
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If your business is a company or partnership, who will sign on the business’ behalf?
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If the other party is a company or partnership, who will sign on the business’ behalf?
Disclosure
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Why are you and the other party exchanging confidential information?
Non-circumvention
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Will both parties be prevented from dealing directly with the other’s suppliers or clients?
Agreement duration
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Will the NDA start on the date it is signed or on a specified date?
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Will the NDA automatically end after 1, 3 or 5 years?
Jurisdiction
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If either party is based in Scotland, will the laws of Scotland or the laws of England and Wales apply to this NDA?
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Common terms in a Non Disclosure Agreement
An NDA protects valuable or sensitive business information from being disclosed to third parties. To do this, an NDA will typically include:
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the parties’ details - the names, addresses, and other details of the businesses or individuals exchanging confidential information. When receiving confidential information from the other, a party is known as a ‘receiving party’. When sharing confidential information with the other, a party is known as a ‘disclosing party’
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obligations regarding the confidential information - sets out the requirements imposed on both parties in relation to any confidential information shared under the NDA to make sure it remains confidential. In mutual NDAs this obligation is mutual and both parties are subject to identical obligations
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non-circumvention - you can choose to require neither party to circumvent (ie bypass) the other by directly approaching their suppliers or clients without their permission. For example, you can require them not to contract directly with the supplier or clients or not to attempt to make contact directly with such suppliers or clients
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permitted disclosures - sets out that any confidential information may be disclosed to employees, professional advisers, agents and sub-contractors if such disclosure is necessary to perform work related to the permitted purpose. There must also be a written agreement or professional obligations requiring the confidentiality of the information to be protected
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ownership - sets out that any confidential information (including intellectual property) disclosed under this NDA remains the property of the disclosing party
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exceptions - sets out the circumstances in which the receiving party does not have to comply with confidentiality obligations (eg if the information was already public knowledge)
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term - sets out how long the NDA will remain in force
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return of confidential information - sets out that any confidential information disclosed under this NDA must stop being used and must be returned at the disclosing party’s request. The receiving party must also certify that they did not make or retain any copies of the confidential information
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remedies - sets out what remedies (including damages, injunctions and specific performance) are available in the event that this NDA is breached
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limitation of liability - sets out the limits on each party’s liability (ie responsibility) in relation to the confidential information being accurate or complete. This clause reduces the risk that either party is exposed to when entering into an NDA and in the event that something goes wrong. For more information, read Limitation of liability clauses
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circumstances beyond the control of either party - sets out what happens in the event of an unforeseen event outside either party’s control, which makes the performance of the party’s obligations impossible or delays them. In such a force majeure event, the affected party must inform the other party immediately, who may then immediately end the agreement
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governing law and jurisdiction - sets out which country’s legal system must be used to resolve any disputes. This is necessary as the legal systems of England and Wales or Scotland differ. For more information, read Jurisdiction and international contracts
Businesses will often start with a standard Non Disclosure Agreement and then customise it further if necessary.
Our sample NDA guides you through the items to include in your document.
If you want your NDA to include further or more detailed provisions, you can edit your document. However, if you do this, you may want a lawyer to review or change the NDA for you, to make sure it complies with all relevant laws and meets your specific needs. Ask a lawyer for assistance.
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Legal tips for businesses
Making an NDA to protect your confidential information is vital for starting and growing your business. Whether you have an idea for a new product or service or are sharing valuable information related to your existing business, an NDA helps ensure that your information is not shared without permission. To ensure your confidential information is safe, consider the following when entering into an NDA:
Determine why exactly you need an NDA
Your Non Disclosure Agreement must clearly specify the permitted purpose for which the confidential information is being exchanged. Before making your NDA you should identify why both parties are exchanging confidential information and set this out in as much detail as possible. Bear in mind, that it is better to have a narrower permitted purpose at the start, as you can always amend and widen it later. However, you will not be able to narrow the restriction on the use of the confidential information at a later date.
Understand when to seek advice from a lawyer
While it is always a good idea to have your NDA reviewed by a lawyer, there are certain circumstances in which you should seek specific advice. Ask a lawyer for advice if:
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any of the parties are based outside England, Wales and Scotland
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more than two parties are exchanging confidential information
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you are exchanging confidential information with a public body (eg a governmental body or university)
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Non Disclosure Agreement FAQs
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What does this NDA cover?
This Non Disclosure Agreement template covers:
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definition of confidential information
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protections for the confidential information
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who is allowed to receive confidential information
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non-circumvention
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disclosures required by law
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termination of this agreement
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remedies if there is a breach of confidentiality
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What is the purpose of a Non Disclosure Agreement and why do I need an NDA?
Asking another party to sign an NDA protects any sensitive information you may share. An NDA protects this information by stating that anything confidential shared between the parties will not be shared with others (except in prescribed circumstances). If this information is shared the agreement is breached and there will be reparations (eg damages) to pay.
Common situations where you may need to use an NDA include when:
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bringing in a consultant
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talking to potential partners (eg new investors or manufacturers)
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hiring an employee
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getting advice on a business idea (eg from marketing agencies, insurance brokers or business coaches)
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What is confidential information?
Confidential information is any information communicated by (or on behalf of) one party (known as a ‘disclosing party’) to another party (known as a ‘receiving party’) that is confidential in nature or which may be considered to be commercially sensitive in nature. The information should also relate to the business or affairs of the disclosing party.
Confidential information can be disclosed in a number of different ways, including:
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in writing
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in electronic or digital form
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verbally
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by inspection of any documents, computer systems or websites
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What type of information may be protected?
Almost any type of information can be confidential information. You can protect both commercial information and personal information. Examples of confidential information include, but are not limited to:
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products
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databases
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recipes
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drawings
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client information or lists
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internal financial reports
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vendor lists
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marketing plans
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What is the purpose of disclosure in an NDA?
When drafting a confidentiality agreement you must disclose (ie state) the purpose of creating the NDA to the other party. This is known as the ‘permitted purpose’.
The permitted purpose sets out precisely what a receiving party is allowed to do with the confidential information communicated to them by a disclosing party.
The purpose of disclosing the information must be legitimate and for specific reasons. You must describe the purpose of disclosure as clearly as possible. For example, confidential information may be disclosed for the purposes of exploring a joint venture between the parties.
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When is information not considered to be confidential?
Information is not deemed to be confidential if it:
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is already known to the party receiving the confidential information at the time of its disclosure
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is known to the public
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comes into the possession of the receiving party from a third party who did not violate any contractual or legal obligations by disclosing this information
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is required to be disclosed by law or by the rules of a court
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is required to be disclosed by a governmental or regulatory body or a recognised investment exchange
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What if only one party is disclosing confidential information?
If only one party is disclosing confidential information (ie if one party is making confidential information available to another party, but that party does not disclose any confidential information) this two-way NDA should not be used. Instead, a Once-way confidentiality agreement should be used.
If you want a simpler agreement, which doesn’t incorporate the full range of provisions set out in the one-way confidentiality agreement, consider using a Letter of confidentiality.
For more information, read Non-disclosure agreements.
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What are the obligations under an NDA?
As NDAs act to protect both parties’ confidential information, they impose stringent obligations on both parties. Under this NDA, both parties must:
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ensure the confidentiality of any information and not share it with anyone else (unless they get the disclosing party’s written consent before doing so)
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not use the confidential information for reasons other than the permitted purpose, either directly or indirectly (unless they have the disclosing party’s written consent)
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protect the other party’s confidential information in the same way they would protect their own confidential information
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What is a non-circumvention clause in a Non Disclosure Agreement?
A non-circumvention clause, such as the one contained in this NDA, prevents the recipient of confidential information from going directly to the disclosing party’s suppliers or clients with the intention of bypassing the disclosing party, thereby harming the disclosing party (or their business). For more information, read Non-circumvention clauses.
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When do Non Disclosure Agreements expire or otherwise end?
The period of time for which each party must keep the information confidential will vary depending on the circumstances.
Confidentiality agreements can be terminated immediately by giving written notice or can automatically end after a set amount of time. This NDA automatically comes to an end after 1, 3 or 5 years. This is known as the ‘long stop date’.
You should set a realistic time period for the duration of the agreement, as information can lose its confidential character or commercial value over time.
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What happens if an NDA is broken?
Remedies are available when the confidentiality of information is breached. The remedies available for breaching a confidentiality agreement are proportionate to the wrong done.
A successful claimant in an action for misuse of confidential information is entitled to a percentage of the profits that have resulted from the misuse of information, damages and/or an injunction (ie a court order prohibiting a party from, or requiring a party to, perform a particular act).
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