Sharing knowledge and information is often necessary when running an organisation, including not-for-profit and/or charitable organisations. In some cases, this knowledge and information might be confidential. For example, it might contain trade secrets or donor lists which could cause monetary or reputational harm if made public. One way to protect against the risk of harm, whilst still sharing confidential information, is to enter into a non-disclosure agreement (NDA).

In this article we explain what an NDA is, when an NDA should be used and provide information about the new oneNDA which can help your organisation by making entering into NDAs easier!

What is an NDA?

An NDA is a non-disclosure agreement (sometimes also referred to as a confidentiality agreement). It is a binding contract used to help ensure confidential information remains confidential. An NDA can be one-sided, so that only one party is required to keep information confidential or it can be mutual, where both parties are sharing information with each other and want to restrict the other from disclosing that information or using the information other than for a specified purpose. In rarer occasions an NDA can be multilateral, where three or more parties agree not to disclose confidential information.

How do NDAs help protect confidential information?

NDAs help protect confidential information because there are consequences associated with breaching an NDA. If a party breaches an NDA, such as by disclosing the confidential information to a third party or using the confidential information in a way not permitted under the NDA, the other party can claim against them in court. Whilst the remedies provided by a court will depend on the circumstances, they can include, for example:

  • injunctive relief (which will help ensure more confidential information is not disclosed or used inappropriately); and
  • monetary damages for loss incurred.

When should an NDA be used?

Organisations should consider using an NDA whenever they are providing a third party with information that they do not want to be disclosed, either publicly or to any specific third parties. NDAs are particularly important where the disclosure of that confidential information could result in loss of profits, resources or reputational harm.

Whilst NDAs can be used in a multitude of contexts and to protect various types of information, common examples of types of information covered by NDAs include:

  • business or strategic plans that are not otherwise in the public domain;
  • trade secrets, technical drawing or designs;
  • customer or donor lists;
  • details about a potential merger or acquisition; and
  • information on a proposed idea (such as campaign ideas).