Non Disclosure Agreement and Confidentiality Agreement: A Legal Guide for UK Businesses

If your business shares sensitive information with employees, contractors, suppliers, investors or potential buyers, you have probably come across the terms “non disclosure agreement” and “confidentiality agreement”. In most UK business contexts, these terms are used interchangeably to describe a contract that helps protect confidential information from unauthorised use or disclosure.

For many SMEs, these agreements are a practical way to reduce risk when discussing new opportunities, outsourcing work, exploring partnerships or sharing commercially valuable know-how. They can help protect trade secrets, pricing, customer lists, product plans, software concepts and other information that gives your business a competitive advantage.

That said, an NDA is not a complete substitute for good internal controls or a well-drafted main contract. It works best when it is tailored to the relationship, used at the right stage and supported by sensible confidentiality practices.

In this guide, we explain how non disclosure agreements and confidentiality agreements generally work in the UK, when a business may want one, what clauses matter most and what common mistakes to avoid.

Are a non disclosure agreement and a confidentiality agreement the same?

Usually, yes. In everyday commercial use, a non disclosure agreement (NDA) and a confidentiality agreement normally mean the same type of legal document.

Both are designed to:

• identify what information is confidential
• limit how that information can be used
• restrict when it can be disclosed
• set rules around who can access it
• deal with what happens when the relationship ends

Some businesses prefer the term “confidentiality agreement” because it sounds broader. Others use “NDA” because it is shorter and widely recognised. In practice, the label matters less than the wording. What really counts is whether the agreement clearly reflects the information being shared and the purpose of the disclosure.

If you want a closer look at the terminology, see Disclosure vs Non-Disclosure: Protecting Your Business with NDAs and Confidentiality Agreements.

It is also common for confidentiality obligations to appear inside a wider commercial contract, such as a Service Agreement, supplier contract or collaboration agreement, rather than in a standalone NDA.

When should a UK business use an NDA?

An NDA can be useful when your business needs to share sensitive information before a fuller commercial arrangement is agreed, or where confidentiality needs particular emphasis.

Common examples include:

• Early commercial discussions: when speaking with a potential partner, distributor, reseller or collaborator
• Contractor and consultant engagements: where an external provider will access confidential systems, plans or customer information
• Software and product development: when discussing an app, platform or technical concept with a developer or agency
• Fundraising or investment conversations: where commercially sensitive information may be shared during discussions
• Business sale discussions: before disclosing operational or financial information during due diligence
• Supplier or manufacturing arrangements: where specifications, methods or pricing need protection

For example, if you are engaging a developer to build a platform, an NDA may be a useful first step before moving to a fuller Software Development Agreement. If you are discussing a joint project, confidentiality obligations may sit alongside a broader Collaboration Agreement.

Not every situation needs a separate NDA. If the main contract already contains clear and suitable confidentiality clauses, that may be enough. The right approach depends on the timing, the sensitivity of the information and the structure of the deal.

If you are weighing up whether an NDA is appropriate, What Is an NDA? A Guide to Non-Disclosure Agreements for UK Businesses is a useful starting point.

What should a good confidentiality agreement include?

A strong NDA should do more than simply say “keep this confidential”. It should explain what is protected, why it is being shared, what the receiving party can and cannot do, and what happens if the arrangement ends.

Key clauses often include:

Definition of confidential information

This is one of the most important parts of the agreement. It should describe the information being protected clearly enough to be meaningful, without being so narrow that important material is left out.

Examples may include business plans, customer lists, pricing, technical information, product specifications, financial information, trade secrets and know-how. Many agreements also make clear that confidential information can be written, oral, visual or digital.

Permitted purpose

The agreement should state why the information is being disclosed, such as evaluating a proposed relationship, carrying out a project or receiving services. This helps limit the receiving party's use of the information to that specific purpose.

Non-disclosure and non-use obligations

The receiving party will usually agree to keep the information confidential, not disclose it except in limited circumstances, not use it outside the agreed purpose and take reasonable steps to keep it secure.

Exceptions

Most NDAs include standard exceptions where information is already public through no fault of the receiving party, was already lawfully known, is independently developed without using the disclosed information, or must be disclosed by law or a regulatory requirement.

Who can access the information

The agreement should say whether disclosure is allowed to employees, professional advisers or subcontractors, and on what basis. This is often limited to people who genuinely need to know and who are themselves under confidentiality obligations.

Duration and end-of-relationship steps

An NDA should deal with how long the obligations last and what happens to the information at the end of the arrangement, including whether documents and files must be returned, destroyed or deleted.

If you want more detail on drafting points, see How To Write an NDA (Non‑Disclosure Agreement) and Non-Disclosure Agreement Template: What To Include And Mistakes To Avoid.

One-way or mutual NDA: which one do you need?

One of the first practical questions is whether the NDA should be one-way or mutual.

A one-way NDA is generally used where only one party is disclosing confidential information. This is common when a business shares information with a contractor, consultant, supplier or prospective buyer.

A mutual NDA is generally used where both parties expect to exchange confidential information, such as during collaboration discussions, reciprocal due diligence or technology partnership talks.

Choosing the right format helps keep the agreement proportionate and easier to follow. If both sides are likely to share sensitive information, a mutual NDA is often more suitable. If only one side is disclosing, a one-way NDA may be simpler and more targeted.

You can read more in What Is A Mutual Non-Disclosure Agreement? and One-Way NDA (Non-Disclosure Agreement) in the UK: Uses and Key Clauses.

It is also important not to confuse confidentiality obligations with post-termination restrictions such as non-compete clauses. Those are separate legal issues and, particularly in employment and worker contexts, their enforceability depends heavily on whether they go no further than reasonably necessary to protect a legitimate business interest.

What mistakes do businesses commonly make?

NDAs are common, but they are not always used well. Some of the most frequent issues include:

• Using a generic template without tailoring it: a free template may not reflect the actual deal, the type of information being shared or the risks involved
• Defining confidential information too broadly or too vaguely: if everything is labelled confidential, the clause may be harder to apply in practice
• Relying on the NDA alone: businesses should still limit access internally, use secure systems and train staff on confidentiality
• Overlooking data protection: if personal data is involved, you may also need to consider UK GDPR and Data Protection Act 2018 obligations
• Forgetting the main contract: where there is an ongoing relationship, confidentiality should usually be dealt with in the wider commercial terms too
• Assuming enforcement is automatic: an NDA can strengthen your position, but outcomes depend on the wording, the facts and the evidence available

If you are using a template, it is worth understanding its limits. How to Use a Confidentiality Agreement Template for Your UK Business may help as a practical starting point.

Key Takeaways

• In most UK business settings, a non disclosure agreement and a confidentiality agreement usually mean the same thing
• An NDA can help protect commercially sensitive information when speaking with contractors, suppliers, collaborators, investors or buyers
• Important clauses include the definition of confidential information, permitted purpose, disclosure restrictions, exceptions, duration and end-of-relationship steps
• Businesses should choose between a one-way and mutual NDA based on whether one or both parties are sharing confidential information
• Confidentiality obligations often need to work alongside wider commercial contracts, not in isolation
• If personal data is being shared, separate data protection obligations may also apply under the UK GDPR and Data Protection Act 2018
• A generic template may be a useful starting point, but it should be reviewed carefully to make sure it fits the actual arrangement

If you would like help preparing or reviewing a non disclosure agreement or confidentiality agreement for your business, you can contact Sprintlaw on 08081347754 or email team@sprintlaw.co.uk.