Confidentiality agreement template: an NDA for your business

What is a confidentiality agreement template?

A confidentiality agreement template, also called an NDA template (Non-Disclosure Agreement), is a ready-made legal document that obliges one or both parties to keep certain information confidential. A good template can be adapted to specific situations and provides quick, reliable protection of your trade secrets.

Whether you are negotiating with a new partner, hiring a consultant or discussing a possible acquisition, a confidentiality agreement is your most important first line of defence against unwanted disclosure.

When do you need a confidentiality agreement?

A confidentiality agreement is relevant in many business situations:

• Business negotiations: when you share strategies, prices or business models with potential partners
• Employment: when employees get access to customer data, product plans or technology
• Freelancers and consultants: when external parties work with confidential systems or processes
• Investor presentations: before you pitch your business idea to investors
• Mergers and acquisitions: during due diligence, where both parties exchange sensitive information
• Supplier collaboration: when you share production methods or pricing

The rule of thumb is simple: if you would not want to see the information in a competitor's annual report, you should protect it with a confidentiality agreement.

Types of confidentiality agreement

Unilateral confidentiality agreement

Only one party, the recipient, is bound to confidentiality. Typically used when:

• You present an idea to an investor
• A new employee signs a confidentiality declaration
• A consultant gets access to your systems

Mutual confidentiality agreement

Both parties are bound to confidentiality. Used when both parties exchange sensitive information, for example in business negotiations or joint ventures.

What must a confidentiality agreement contain?

A legally robust confidentiality agreement should cover these seven elements:

1. Definition of confidential information

Be precise in the definition. "All information" is typically too broad and can make the agreement hard to enforce. State which types of information are confidential: technical knowledge, customer data, financial information, business strategies, etc.

2. The recipient's obligations

Define clearly what the recipient:

• May not do: disclose, copy or use for their own purpose
• Must do: store the information securely and limit access internally

3. Exceptions to confidentiality

Exceptions are necessary to make the agreement reasonable and enforceable. Standard exceptions include:

• Information that is already publicly available
• Information the recipient already knew before the agreement
• Information received from a third party without a duty of confidentiality
• Information that by law must be disclosed to public authorities

4. The duration of the agreement

State two time limits:

• The term of the agreement: how long the collaboration itself lasts
• The duration of the confidentiality period: typically 2 to 5 years after the agreement ends

For actual trade secrets (for example proprietary formulas or source code) you can consider an unlimited confidentiality period, for as long as the information remains secret.

5. Consequences of a breach

A confidentiality agreement without sanctions has limited deterrent effect. Include:

• Liability for damages: the recipient is liable for documented losses
• A contractual penalty: a predetermined amount per breach that avoids the burden of proving the size of the loss
• An injunction: the right to seek an injunction on an imminent or ongoing breach

6. Choice of law and venue

State that Danish law applies and that disputes are handled by a specific Danish court (for example the Maritime and Commercial Court in Copenhagen for commercial cases).

7. The parties' signatures

Both parties (or all parties in a mutual NDA) must sign the agreement with their name, position and date to make it binding.

The confidentiality agreement and the Trade Secrets Act

Denmark implemented the EU directive on trade secrets in the Trade Secrets Act (lov om forretningshemmeligheder, 2018). The Act provides separate protection of trade secrets, but presupposes that you have taken reasonable confidentiality measures.

A signed confidentiality agreement is documentation of precisely these measures. Without an agreement, it can be hard to prove that you actively protected the information.

Typical mistakes in a confidentiality agreement

Too broad a definition of confidential information

A template that simply says "all information is considered confidential" can prove hard to enforce. Define specifically what is protected.

No exception clauses

Exceptions are not a weakness, they are legally necessary to make the agreement reasonable and enforceable under Danish law.

An unrealistically long confidentiality period

A confidentiality period of more than 20 years will rarely be upheld by a Danish court for ordinary information. Stick to 2 to 5 years for standard information.

A lack of specification of the purpose

Always state what the confidential information may be used for, not just what it may not be used for.

A confidentiality agreement in practice, an example

Scenario: The software company TechDK is considering a collaboration with the marketing agency Nordisk Bureau. Before the negotiations start, both parties sign a mutual confidentiality agreement.

The agreement covers:

• TechDK's product roadmap and source code
• Nordisk Bureau's customer data and price models
• Confidentiality period: 3 years after the collaboration ends
• Contractual penalty: DKK 50,000 per documented breach
• Exception: information published by one of the parties

With the agreement in place, both parties can share the information necessary to assess the collaboration, without risking that sensitive information ends up with competitors.

Create your confidentiality agreement with LegalDock

With LegalDock you can create a tailored confidentiality agreement in a short time. You choose whether the agreement is unilateral or mutual, define the confidential information and set the duration and sanctions, all guided by our legal template.

The contract can be signed digitally by all parties and stored securely for future reference.