Information Protection
Non-Disclosure Agreement
Also: NDA, Confidentiality Agreement, Non-Disclosure, Secrecy Agreement · NDA, Confidentiality Agreement, Non-Disclosure, Secrecy Agreement, Proprietary Information Agreement
A non-disclosure agreement (NDA) is a standalone contract in which one or both parties agree to keep specified information confidential and not share it with unauthorized third parties.
NDAs are commonly used before business discussions, vendor evaluations, M&A transactions, and any situation where sensitive information needs to be shared.
Lawyer Explanation
A non-disclosure agreement is a contract that creates confidentiality obligations between the parties. It defines what information is covered, how it may be used, who may have access to it, and how long the obligation lasts.
NDAs may be mutual — requiring both parties to protect each other's information — or one-way, requiring only the receiving party to maintain confidentiality.
The NDA is distinct from a confidentiality clause within a broader agreement, though both serve the same fundamental purpose. A standalone NDA is often used at the outset of a business relationship, before a more comprehensive agreement is in place.
What It Actually Does
An NDA answers: "Before we share sensitive information with each other, what are the rules about how it can be used and who can see it?" For example, before a company shares its proprietary technology with a potential partner for evaluation, the parties may sign an NDA to ensure that the technology remains confidential — even if the partnership does not proceed.
Why It Matters
NDAs are one of the most commonly used legal agreements in business. They provide a contractual basis to share sensitive information — such as trade secrets, financial data, customer lists, and proprietary processes — while protecting against unauthorized disclosure.
Without an NDA, a party that shares confidential information may have limited recourse if the other party discloses or misuses it. The NDA creates a clear record of the confidentiality obligation and the consequences of breach.
Example
A company is considering acquiring a smaller competitor. Before sharing financial statements and customer data with the potential acquirer, the target company requires the acquirer to sign a mutual NDA.
The NDA ensures that the information shared during due diligence remains confidential — even if the acquisition does not proceed — and provides a basis for legal action if the acquirer misuses the information.
Common Language You May See
"Each party agrees to hold the other party's Confidential Information in strict confidence and not to disclose such information to any third party without the prior written consent of the disclosing party."
"This Agreement shall remain in effect for a period of [two/three/five] years from the date of execution, unless earlier terminated by mutual written agreement."
What Stewart Law Looks For
- Is the NDA mutual or one-way?
- How is "confidential information" defined?
- What are the permitted uses of confidential information?
- What are the standard exclusions?
- Who may the receiving party share confidential information with?
- What standard of care is required?
- How long does the NDA last?
- Does the NDA address the return or destruction of confidential information?
- What remedies are available for breach?
- Does the NDA address residual knowledge retained in the receiving party's employees' memories?
- Is the NDA consistent with any broader agreement between the parties?
- Does the NDA address required disclosures to government authorities or courts?
Common Red Flags
An NDA deserves closer attention when it:
- defines confidential information so broadly that it covers publicly available information
- fails to include standard exclusions for publicly known or independently developed information
- has no defined term or expiration date
- is one-sided in a situation where both parties are sharing sensitive information
- fails to address the return or destruction of confidential information
- is silent on remedies for breach
- contains non-compete or non-solicitation obligations that go beyond confidentiality
Perspectives
Customer / Buyer
The party disclosing confidential information will generally want a broad definition of confidential information, a high standard of care, a long term, and meaningful remedies — including injunctive relief — for any breach.
Vendor / Seller
The party receiving confidential information will generally want a clear and limited definition of what is confidential, standard exclusions, a reasonable standard of care, and a defined term.
Florida & Federal Considerations
Florida
Florida recognizes and enforces non-disclosure agreements in commercial contexts. Florida's Uniform Trade Secrets Act provides additional protections for qualifying trade secrets beyond what a contractual NDA may provide.
Florida courts have addressed NDA enforceability in a variety of commercial and employment contexts.
Related Terms
Contracts Where You'll Commonly See It
Frequently Asked Questions
Is an NDA the same as a confidentiality agreement?
The terms are often used interchangeably. Both refer to an agreement in which one or both parties agree to keep specified information confidential. "NDA" typically refers to a standalone agreement, while a "confidentiality clause" may appear within a broader contract.
What is the difference between a mutual NDA and a one-way NDA?
A mutual NDA requires both parties to keep each other's information confidential. A one-way (or unilateral) NDA requires only one party — typically the receiving party — to maintain confidentiality.
How long does an NDA last?
The duration varies. Many NDAs have a defined term — such as two to five years — after which the confidentiality obligation expires. Some NDAs have no expiration date for certain categories of information, such as trade secrets.
Can an NDA prevent someone from working for a competitor?
An NDA alone generally does not restrict employment. Non-compete and non-solicitation obligations are separate provisions that may appear in the same agreement or in a separate document.
What happens if someone violates an NDA?
Remedies for an NDA breach may include injunctive relief to stop further disclosure, damages for losses caused by the breach, and in some cases attorneys' fees. The available remedies depend on the agreement and applicable law.
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