NDAs: protect your business secrets

What is an NDA?

An NDA (Non-Disclosure Agreement), or confidentiality agreement, is a legally binding agreement that obliges one or both parties to keep certain information confidential. It is an important tool for protecting your business's trade secrets. Beyond the agreement, genuine trade secrets are also protected by the Trade Secrets Act, but a clear NDA makes it easier to define what is confidential and what happens on a breach.

When do you need an NDA?

• Business negotiations: when you share ideas or plans with potential partners
• Employment: when employees gain access to sensitive information
• Freelance and consultancy collaboration: when external parties get insight into your processes
• Investor presentations: when you pitch your business idea
• Mergers and acquisitions: during the due diligence process

One-way vs. mutual NDA

One-way NDA

Only one party is obliged to keep information confidential. Typically used in employment and at investor presentations.

Mutual NDA

Both parties are obliged to keep information confidential. Used in business negotiations and collaborations where both share sensitive information.

What should an NDA contain?

1. A definition of confidential information: what is covered?
2. Obligations: what may the recipient not do?
3. Exceptions: what is not confidential?
4. Duration: how long does the confidentiality apply?
5. Consequences of a breach: what happens on a violation?
6. Choice of law and venue: which law applies, and where are disputes decided?

Typical duration

Most NDAs have a duration of a couple of years after the agreement ends. For genuine trade secrets, the confidentiality can in principle last indefinitely, as long as the information remains secret.

Tips for a good NDA

• Be precise in the definition of confidential information
• Include reasonable exceptions (for example publicly available information)
• Set a clear time frame
• Consider a contractual penalty for a breach, so you do not have to prove a specific loss
• Use a professional template

Conclusion

A confidentiality agreement is a simple and effective way to protect sensitive information when you share it with partners, employees or advisers. Be precise about what is confidential, how long it applies, and what the consequence of a breach is.

---

The content of this article is for guidance only and does not constitute legal advice. Consult a lawyer for advice on your specific situation.