As a commercial solicitor, one of the most common documents I’m asked to draft or review for my business clients is a non-disclosure agreement, often simply called an NDA. If you’ve ever wondered what an NDA is, when you might need one, or whether it’s worth bothering with, this blog will give you the essential information you need to understand.

What Is an NDA?

An NDA is a legal agreement between two or more parties that sets out how confidential information will be handled. It’s essentially a promise: “You can share this sensitive information with me, and I won’t disclose it to anyone else.”

NDAs can be one-way (where only one party is sharing information) or mutual (where both sides are disclosing confidential details – for example, during a potential business partnership or joint venture).

When would a business use an NDA?

There are many situations where you might want to protect confidential information, including:

• Presenting a new product or idea to investors, partners, or manufacturers
• Entering discussions with a potential buyer, supplier, or collaborator
• Sharing financial information during due diligence
• Giving employees or freelancers access to sensitive data
• Discussing software, algorithms, or trade secrets

Put simply, if you’re sharing information that gives your business a competitive edge, or that you wouldn’t want your competitors to see, an NDA should be on the table.

What does an NDA actually do?

NDAs legally bind the receiving party not to:

• Disclose the confidential information to anyone else (except in very limited circumstances, e.g. if legally required)
• Use the confidential information for any purpose other than what’s agreed
• Copy, store or share the information without permission

If the agreement is breached you may have a claim for damages, or in serious cases, the right to seek an injunction to stop the information being used or shared.

How NDAs protect small and medium sized businesses

SMEs are often more vulnerable than big corporations when it comes to losing key ideas, products, or know-how. A well-drafted NDA can:

• Create a deterrent: Knowing there’s a legal obligation can stop misuse of your ideas
• Support legal action: If a dispute arises, an NDA is a key piece of evidence
• Build trust: It shows you take your business and your partners seriously
• Encourage openness: Parties are more likely to share useful detail if there’s legal protection

A few practical tips

• Don’t rely on templates: Many NDAs downloaded online are either too vague or too complex – and often not suitable for UK law.
• Be clear about what is confidential: Good NDAs define what counts as “confidential information” – and what doesn’t.
• Set a time limit: NDAs should include a realistic duration for confidentiality, often between 2–5 years.
• Enforceability matters: A vague or overly broad NDA might not hold up in court.

Summary

NDAs are not just for big businesses or tech giants. If you’re a small or growing business sharing sensitive information – whether it’s a recipe, a prototype, or a client list – having a clear, enforceable NDA can be a smart and inexpensive way to protect your interests.

If you’re not sure whether you need an NDA, or you’d like help drafting one that’s tailored to your needs, I’d be happy to help. 

If you’d like help with negotiating contract terms, feel free to get in touch. It’s a small step that can make a big difference.

Contact Sarah Naylor on 01302 320621 or at sarah.naylor@switalskis.com.