# Non-disclosure agreement (NDA)

Source: https://contracko.com/glossary/nda

# Non-disclosure agreement (NDA)

A contract obliging parties to keep shared information secret and use it only as agreed.

## Definition

A non-disclosure agreement is a contract (one-way or mutual) that binds the recipient of confidential information to keep it secret and to use it only for the stated purpose. NDAs typically define what counts as confidential, list exceptions, and set how long the obligation lasts. They are often signed before negotiations, due diligence, or technical evaluations begin.

## Example

> Two start-ups sign a mutual NDA before exploring a possible merger, so each can review the other's financials safely.

## Why this is a business risk

An NDA signed without checking its scope, duration, or exceptions can give a false sense of security. A one-way NDA protects only the disclosing party; if both sides share sensitive material, a mutual NDA is needed. Companies that rely on template NDAs often find them too vague to enforce or inconsistent with the actual flow of information.

## How to manage it

- Decide at the outset whether the NDA should be one-way or mutual, based on who is sharing what.
- Define the permitted purpose narrowly: "evaluating a potential partnership" is better than "any business purpose".
- Set a realistic duration: perpetual NDAs are often unenforceable; two to five years is standard for most commercial disclosures.
- List standard exclusions clearly: information already public, independently developed, or required to be disclosed by law.

### How Contracko helps

Contracko stores NDAs in a searchable repository and tracks their expiry dates with automatic reminders, so you always know which confidentiality obligations are live. The AI review extracts scope, duration, and permitted-purpose fields so cross-functional teams can query NDA coverage without reading each document.

## Relevant for

[Software & SaaS](https://contracko.com/industries/software-saas)[Pharmaceuticals & Biotech](https://contracko.com/industries/pharma-biotech)[Consulting](https://contracko.com/industries/consulting)[Financial Services](https://contracko.com/industries/financial-services)

## Related clauses

- [Confidentiality Clause](https://contracko.com/clause-library/confidentiality)
- [Non-Solicitation Clause](https://contracko.com/clause-library/non-solicitation)
- [Data Processing Clause](https://contracko.com/clause-library/data-processing)

## Related terms

- [Confidential information](https://contracko.com/glossary/confidential-information)
- [Data processing agreement (DPA)](https://contracko.com/glossary/data-processing-agreement)
- [Intellectual property](https://contracko.com/glossary/intellectual-property)

### Never miss a contract deadline again

- AI finds renewal and notice dates
- Risks and obligations are surfaced automatically
- Reminders help you act before dates slip

Drop a contract to start

PDF, DOCX, PNG, or JPG

[Start 7-day trial](https://app.contracko.com/register?appLanguage=en&utm_source=glossary_sidebar&utm_medium=lead_magnet&utm_campaign=glossary_sidebar_contract_upload&content_slug=nda&content_title=Non-disclosure+agreement+%28NDA%29&cta_placement=glossary_sidebar_cta&source_tool=glossary_sidebar_nda)

GDPR compliant. Encrypted. Never used for AI training.

## Frequently asked questions

Common questions about this term.

- **Q:** Is an NDA enforceable if no information is marked confidential?
  **A:** It can be, if the definition covers information that is confidential by its nature. But clear marking and a narrow purpose make enforcement far more straightforward.

- **Q:** What is the difference between a one-way and a mutual NDA?
  **A:** A one-way NDA binds only the recipient of information to keep it secret. A mutual NDA binds both parties because both will disclose sensitive information to each other.

- **Q:** Can an NDA stop an employee from using knowledge gained at work?
  **A:** An NDA can protect specific confidential information and trade secrets, but it cannot prevent an employee from using general skills and experience. Dutch courts draw this line case by case.

- **Q:** Do NDAs need to be notarised or registered to be valid in the Netherlands?
  **A:** No. A written (including electronically signed) NDA is sufficient. No notarisation or registration is required for an NDA to be binding under Dutch law.

- **Q:** What happens if a party is compelled by law or a court to disclose confidential information?
  **A:** Most NDAs include a carve-out for legally compelled disclosure. The disclosing party is typically required to give the other side prompt notice and cooperate to seek a protective order if possible.

## See these terms in your own contracts

Upload a contract and Contracko pulls out the key terms, dates and obligations, then reminds you before each one matters.

[Start 7-day free trial](https://app.contracko.com/register?appLanguage=en)

Book demo