What is an NDA? Non-Disclosure Agreement UK Explained

An NDA, or Non-Disclosure Agreement, is one of the most commonly used legal documents in business — yet many people have signed one without fully understanding what they agreed to. This guide explains exactly what an NDA is, how it works, and when you need one.

What Does NDA Stand For?

NDA stands for Non-Disclosure Agreement. It is also known as a confidentiality agreement, a confidential disclosure agreement (CDA), or a secrecy agreement. All of these terms refer to the same type of legal document: a contract that obligates one or both parties to keep certain information confidential.

How Does an NDA Work?

An NDA creates a legally binding obligation on the party (or parties) who sign it to keep specific information confidential. If they breach the NDA by sharing that information with a third party, the other party can sue them for damages in court. The key elements of any NDA are:

• Definition of confidential information: What information is covered by the agreement
• Obligations: What the receiving party must and must not do with the information
• Exclusions: Information that is already public, or independently developed, is typically excluded
• Duration: How long the obligations last — typically 1–5 years
• Consequences of breach: What happens if the agreement is broken

Mutual vs One-Way NDA

There are two main types of NDA:

• One-way (unilateral) NDA: Only one party discloses confidential information — commonly used when sharing a business idea with a potential investor or partner
• Mutual (bilateral) NDA: Both parties share confidential information — used when two companies are exploring a collaboration, merger or partnership

What is Not Protected by an NDA?

An NDA cannot cover information that is already publicly available, information the receiving party already knew before signing, information independently developed by the receiving party, or information the receiving party is legally compelled to disclose (e.g. in court).