A Non-Disclosure Agreement (NDA) — also known as a confidentiality agreement — is a legally binding contract used in England and Wales to protect sensitive or proprietary information shared between two or more parties. It creates a legal obligation on the Receiving Party to keep the disclosed information confidential and to use it only for the specific purpose set out in the agreement. NDAs are a cornerstone of commercial practice in the United Kingdom and are routinely used across every industry sector, from technology and finance to manufacturing and creative services.

Under English common law, an NDA is enforceable as a contract provided it meets the basic requirements of offer, acceptance, consideration, and certainty of terms. The consideration in a typical NDA is the mutual exchange of promises — the Disclosing Party agrees to share valuable information, and the Receiving Party agrees to keep it confidential. English courts will enforce NDAs but will scrutinise their scope to ensure they do not unreasonably restrain trade or contravene public policy.

A UK NDA must comply with several pieces of legislation that distinguish it from NDAs used in other jurisdictions. The Data Protection Act 2018 (which incorporates the UK General Data Protection Regulation following the UK's departure from the European Union) applies wherever the Confidential Information includes personal data. The Contracts (Rights of Third Parties) Act 1999 is relevant because, unless expressly excluded, third parties who benefit from a contractual term may acquire rights to enforce it — a well-drafted UK NDA will exclude this. From October 2025, the Victims and Prisoners Act 2024 introduced new limitations on NDAs involving criminal conduct disclosures.

NDAs can be structured as unilateral (one-way) agreements — where only one party discloses information — or as mutual (two-way) agreements — where both parties disclose information to each other. Our UK NDA template is drafted as a unilateral agreement governed by the laws of England and Wales, with exclusive jurisdiction conferred on the courts of England and Wales.

A Non-Disclosure Agreement is appropriate in a wide range of commercial and professional situations in England and Wales. You should use an NDA whenever you are disclosing information that has real commercial value and that you wish to prevent from entering the public domain or being used for any purpose other than the one you have specified.

The most common circumstances in which a UK NDA is required include: discussions with a prospective business partner or joint venture partner before a formal agreement is reached; negotiations for the purchase or sale of a business, where the buyer requires access to financial records, customer data, and operational information; disclosures to potential investors during fundraising rounds; engaging contractors, consultants, or freelancers who will have access to proprietary systems, source code, or client information; licensing negotiations where trade secrets or patentable inventions are discussed; and employment relationships where senior employees, directors, or technical staff have access to confidential business strategies.

In the employment context, it is important to distinguish between pre-employment NDAs (signed at or before the start of employment) and post-employment NDAs or settlement agreements (sometimes called 'gagging clauses'). Following the changes introduced by the Victims and Prisoners Act 2024, NDAs used in a settlement context cannot prevent an individual from reporting criminal conduct to the police, making a protected disclosure, or cooperating with law enforcement. This applies to all NDAs entered into on or after 1 October 2025.

An NDA is particularly valuable when intellectual property is being shared with a third party prior to a patent application being filed, since disclosure without confidentiality protection can constitute prior art that undermines patent protection. Similarly, in the context of creative industries, NDAs protect undisclosed scripts, concepts, or designs before formal IP protection is sought.

A well-drafted Non-Disclosure Agreement for use in England and Wales should contain several key provisions that distinguish it from NDAs used under other legal systems.

The definition of Confidential Information is the most critical clause in any NDA. It should be drafted with sufficient breadth to cover all genuinely sensitive information while being specific enough to give the Receiving Party clear notice of what is protected. Overly vague definitions are harder to enforce in English courts. The definition should also clearly state the exclusions — information already in the public domain, information independently developed by the Receiving Party, or information disclosed by a third party without restriction.

The obligations clause sets out precisely what the Receiving Party may and may not do with the Confidential Information. Under English law, this typically includes obligations to maintain confidentiality, to use the information only for the specified Purpose, to restrict access to authorised personnel, and to promptly notify the Disclosing Party of any unauthorised disclosure.

The compelled disclosure clause is important: it recognises that in some circumstances — such as a court order or regulatory requirement — the Receiving Party may be legally compelled to disclose information, and sets out the procedure to be followed in such circumstances, including giving the Disclosing Party prior notice where possible.

The remedies clause acknowledges that damages alone may be inadequate in the event of a breach and expressly preserves the Disclosing Party's right to seek injunctive relief from the courts of England and Wales. English courts have broad powers to grant injunctions — including urgent interim injunctions — to prevent further disclosure.

The exclusion of third-party rights under the Contracts (Rights of Third Parties) Act 1999 is a standard provision in English commercial contracts and should always be included in a UK NDA. The governing law and jurisdiction clause specifying England and Wales is essential for ensuring that any disputes are resolved in the correct forum under the correct legal system.