When Do You Need an NDA? A Plain-English Guide for England and Wales

You are about to share something valuable. A product idea, a customer list, pricing, a business plan. Before you do, someone says: "Should we sign an NDA first?"

An NDA, short for non-disclosure agreement, is a written promise to keep information confidential. It is also called a confidentiality agreement. It is simple, widely used, and often misunderstood. This guide explains when you need one, what it should say, and what it cannot do.

What an NDA actually does

An NDA sets out what information is confidential, who may see it, what they can use it for, and how long the promise lasts. If someone breaks it, you have a written agreement to point to.

It does not stop leaks from happening. It gives you a clear record of what was agreed and a route to ask for a remedy if the promise is broken. That is useful, but it is not a magic shield.

When you should consider an NDA

An NDA is worth having when you are about to share information that would hurt you if it spread. Common examples include:

• Talking to a possible investor, buyer or business partner
• Hiring a freelancer or contractor who will see your systems, customers or plans
• Sharing a product design or process with a manufacturer or developer
• Letting a supplier see your pricing or customer details
• Discussing a possible sale of your business

If the information is already public, or would not matter if it leaked, an NDA adds paperwork without much benefit.

One-way or two-way?

A one-way (unilateral) NDA protects one party. You share, they promise to keep it secret. This suits hiring a freelancer or pitching to a supplier.

A mutual (two-way) NDA protects both sides. Each party shares information and each promises confidentiality. This suits partnership talks or a sale discussion, where both sides open their books.

Choosing the wrong type is a common mistake. A one-way NDA handed to someone who is also sharing sensitive information may be refused, or may leave them unprotected.

What a good NDA should include

Every NDA should be clear on these points:

• Who the parties are. Full names and addresses, or company names and registered numbers.
• What counts as confidential. Be specific enough to be useful. "All information" is vague. Naming categories such as customer lists, financial data and source code is clearer.
• What is not confidential. Information that is already public, or that the other party already legitimately had, is normally excluded.
• What the information can be used for. For example, "to assess the proposed partnership" and nothing else.
• Who else can see it. Advisers, employees or directors who need to know, who are themselves bound to keep it confidential.
• How long it lasts. A fixed number of years, or until the information becomes public. Be realistic. Very long terms can be hard to justify.
• What happens at the end. Return or destroy the information.
• Governing law. For a document prepared for England and Wales, it should say so.

What an NDA cannot do

This is where many people are caught out.

It cannot silence a victim of crime. Under section 17 of the Victims and Prisoners Act 2024, which came into force on 1 October 2025, a term in an agreement is void if it stops a victim of crime (or someone who reasonably believes they are one) from making certain disclosures. These include disclosures to the police or other law enforcement bodies, to qualified lawyers, and to victim support services. If you are using an NDA in an employment or workplace setting, take extra care. The Employment Rights Act 2025 also brings changes affecting NDAs in harassment and discrimination situations, and these are being phased in.

It cannot protect information that is not really confidential. If something is public knowledge, an NDA will not change that.

It cannot guarantee you will win in court. Enforcement depends on the facts, and court action costs time and money.

It does not replace other protections. Trade marks, patents and copyright protect other things. An NDA is one tool, not the whole toolbox.

Common NDA mistakes

• Signing after the information has been shared. Sign first.
• Using a vague description of "confidential information".
• Forgetting to name who may see it.
• Copying a template written for a different country. Scotland and Northern Ireland have their own legal systems. A document prepared for England and Wales should not be assumed to work elsewhere.
• Making the restrictions so wide that nobody could comply.

Do I need a solicitor?

For a simple, standard situation, such as protecting a business idea during early talks, a well-structured template can be a sensible starting point. For high-value deals, disputes, or anything involving employment claims or allegations of wrongdoing, speak to a solicitor.