NDA template: what should it contain?

When you share sensitive business information with a potential partner, supplier or employee, an NDA (Non-Disclosure Agreement), in Danish a fortrolighedsaftale, is your first legal defence. A good NDA ensures that the other party cannot use or pass on your information without consequences. A poor NDA gives you false security.

This guide explains what a Danish NDA should contain, when you need one, and which mistakes weaken an agreement.

What is an NDA?

NDA stands for Non-Disclosure Agreement, a legal agreement that obliges one or both parties not to pass on certain information to third parties. In Denmark it is often used synonymously with a fortrolighedsaftale or a tavshedserklæring.

NDAs are used in a wide range of situations:

• Business negotiations: before you share financial figures, product plans or trade secrets with a potential buyer, investor or partner
• Supplier agreements: before a subcontractor gains access to your systems, customer data or production processes
• Employment: as part of an employment contract or as a separate document for particularly sensitive positions
• Investor pitch: before you pitch your idea to investors
• Software development: before you give an external developer access to your technical foundation

One-way vs. mutual NDA

There are two basic forms of confidentiality agreement:

One-way NDA

Only one party is obliged to keep information confidential. Typically used when you share information with one recipient and do not receive confidential information in return.

Example: a startup shares its business plan with a potential investor.

Mutual NDA

Both parties are obliged to keep information confidential. Used for a mutual exchange of information, for example in a merger, joint-venture negotiations or a collaboration where both sides share sensitive information.

The 8 most important elements in a Danish NDA

1. The parties

State clearly:

• Full names, addresses and CVR numbers (for companies)
• Who shares information (the disclosing party) and who receives it (the recipient)
• The date the agreement is entered into

2. A definition of confidential information

This is the most important section. The more precisely you define what is confidential, the easier it is to enforce the agreement.

A broad definition (recommended): "All information the disclosing party shares with the recipient in connection with [the purpose of the agreement], whether communicated orally, in writing, electronically or otherwise, and which is marked as confidential or which the recipient should understand is confidential."

Typically excluded:

• Information that is publicly available (and not due to the recipient's breach)
• Information the recipient already knew before the agreement
• Information the recipient has lawfully received from a third party
• Information the recipient has developed independently

3. The purpose of the information sharing

State precisely what the information may be used for: "Confidential information may be used solely to evaluate a potential collaboration on [describe]."

A clearly defined purpose clause prevents the recipient from using your information for other purposes, for example as competitive insight.

4. The obligations

The recipient is typically obliged to:

• Keep the confidential information secret
• Not copy, distribute or disclose the information to third parties
• Only give access to its own employees on a "need to know" basis
• Protect the information with at least the same security level as its own confidential information

5. Duration

The confidentiality obligation should have a time limit. Typically:

• A couple of years is the norm for most commercial NDAs
• For technology businesses and trade secrets, the period can be longer
• Certain obligations about genuine trade secrets can apply as long as the information remains secret

6. Consequences of a breach

An NDA without clear consequences is weak. State:

• The right to seek an injunction on a threatened or ongoing breach
• Liability for loss resulting from a breach
• Possibly a contractual penalty (a fixed amount per breach), which makes enforcement far easier

7. Returning or destroying information

State what happens to the confidential information when the collaboration ends:

• Should the information be returned or deleted?
• Should the recipient confirm the deletion in writing?

8. Choice of law and venue

State that Danish law applies and at which court disputes are heard. For international agreements, arbitration can be considered.

What weakens an NDA?

Not all NDAs are equally easy to enforce. These are the most frequent causes of problems:

Too broad a definition

If you try to protect all information, including publicly available material, the courts may limit the agreement to what is reasonable.

An unreasonable duration or reach

An NDA that in practice amounts to an open-ended and total ban on working in the industry can be set aside as unreasonable under section 36 of the Contracts Act.

A missing signature

An NDA is only binding when the parties have accepted it. Make sure it is signed before you share information. Note that Danish contract law does not require "consideration" as known from Anglo-American law; a one-way confidentiality agreement, where only one party commits, is fully binding.

Does an NDA protect against every scenario?

No. An NDA is one layer of protection, but it:

• Does not prevent a breach; it only allows you to react afterwards, including with an injunction and damages
• Is harder to enforce across borders, especially against parties in countries without effective enforcement
• Does not cover information already leaked; react quickly to a breach

For businesses with trade secrets, it is important to combine an NDA with access control, encryption and physical security measures.

NDA and employment

Many employment contracts contain a confidentiality clause. There are, however, important differences from a standalone NDA:

• A confidentiality clause in an employment contract does not require separate compensation, unlike a non-compete or customer clause
• Genuine trade secrets are in addition protected by the Trade Secrets Act of 2018, which replaced the earlier protection in the Marketing Practices Act

A digitally signed NDA

In Denmark, digitally signed documents are legally binding on a par with handwritten signatures, provided the signature meets the applicable requirements, including the eIDAS Regulation. A signature via MitID meets these requirements.

Frequently asked questions

What does it cost to make an NDA?

An NDA drawn up by a lawyer can cost several thousand kroner. A tried-and-tested template gives you a legally solid document at a far lower price.

Do I need an NDA at a job interview?

Generally not. A potential employer rarely discloses business-critical secrets at a job interview. But if you are invited to take part in a specific project as part of the selection, an NDA can be relevant.

Can I use an English NDA in Denmark?

An English-language NDA can be valid in Denmark, but for national agreements a Danish-language version is recommended. Internationally, English is the standard; state the choice of law (typically Danish law) and venue explicitly.

Is an NDA the same as a non-compete clause?

No. An NDA protects confidential information. A non-compete clause limits the ability to work for competitors. The two can appear in the same contract but are legally different obligations with different rules.

What happens if the other party breaches the NDA?

You can claim damages for the loss you have suffered. If you have agreed a contractual penalty, the amount is predetermined. You can also seek an injunction that immediately stops the harmful act.

Conclusion

An NDA is a simple but effective tool for protecting your business's most sensitive information. The key to an effective NDA is a precise definition of confidential information, a clear purpose, a realistic duration and clear consequences of a breach. Use a professional template as a foundation and adapt it to the specific collaboration.

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