Confidentiality agreement template

A confidentiality agreement, often called a non-disclosure agreement (NDA), is a legal contract used to protect commercially sensitive information shared between parties. It allows businesses to share confidential information with confidence, knowing it cannot be used or disclosed beyond the agreed purpose.

NDAs are commonly used when parties are exploring a possible business relationship, such as:

• A company speaking to a potential investor
  
• A seller disclosing information to a potential buyer
  
• An inventor sharing details with someone who may help fund or exploit a business idea
  
• Businesses considering a joint venture
  

The NDA sets out key terms including:

• What information is protected
  
• How it can and cannot be used
  
• Who can access it
  
• How long confidentiality obligations last
  

If a formal deal goes ahead, the final agreement will often include its own confidentiality provisions, replacing the NDA.

You should use an NDA whenever you need to share sensitive information for a potential business deal but want to protect how that information is handled.

Common examples include:

• Discussions with potential investors or buyers
  
• Sharing information on new products, ideas, or services
  
• Joint ventures or partnerships where both sides exchange confidential information
  
• Giving access to sensitive business data or financial information
  

An NDA helps ensure the recipient only uses the information for the agreed purpose and does not share it without permission. This helps protect your business’s commercial interests whether or not the deal proceeds.

NDAs can be either “one way” or “two-way/mutual”.  A “one way” NDA covers situations where only one party discloses confidential information, such as the seller of a property or business.  A “two-way” or “mutual” NDA applies where both parties will disclose their own confidential information, as in the case of a proposed joint venture.

An NDA is usually only enforceable if there is clear evidence that both parties agreed to it. A signed agreement is the simplest and safest way to prove this.

Without signatures, it becomes harder to show the parties intended to be legally bound. In some cases, other evidence of agreement (such as conduct or correspondence) may be enough, but this is much less reliable.

• A signed NDA clearly demonstrates mutual agreement
• Without a signature, enforcement becomes more difficult and uncertain
  
• Best practice is always to sign the NDA to ensure clear, enforceable terms

An NDA usually protects confidential information shared during business discussions. This can include a wide range of commercially sensitive material.

Typical examples of information covered include:

• Financial information, accounts, and forecasts
  
• Commercial terms, pricing, and customer lists
  
• Product designs, software, and technical data
  
• Intellectual property and know-how
  
• Business plans, strategies, and marketing information
  

The NDA will also set out permitted disclosures (for example, to employees or professional advisers) and any exceptions, such as disclosures required by law.

Your NDA templates should be reviewed regularly to ensure they reflect current legal standards and your business’s needs.

• Review every 1–2 years as part of good contract management
  
• Update if your business changes how it works with customers, suppliers, or partners
  
• Review if there are changes in law, particularly around data protection or intellectual property
  
• Revisit after any dispute or negotiation where the existing NDA did not provide clear protection
  

Keeping your NDA up to date helps ensure it remains commercially relevant and legally effective.

Our NDA templates reflect how AI and automation are now part of many business processes.  The revised wording includes restrictions on using confidential information with public AI platforms – such as ChatGPT or Copilot – unless the disclosing party gives written consent. There’s also a carefully drafted exception in the long form NDA for private, internal AI tools, provided strict confidentiality and security measures are in place.

We also clarify how confidential data may be retained in archive or back-up systems, where deletion isn’t practical. These updates help ensure your NDA remains effective in today’s digital environment.

You can read more about these updates in our blog on how PaperRock’s NDAs tackle AI and digital risk.