5 Things you Should Know About Non-Disclosure Agreements

5 Things you Should Know About Non-Disclosure Agreements

Non-Disclosure Agreements (NDAs) are essential legal documents used in various industries to protect sensitive information and prevent unauthorised disclosure. They play a pivotal role in safeguarding a company’s trade secrets, proprietary information, and other confidential data.

Therefore, understanding NDAs is crucial to ensure their proper use and avoid contractual disputes. In this article, we will explore 5 key things you should know about NDAs.

1. Definition and purpose of NDAs

Non-disclosure agreements, often known as confidentiality agreements, are legally binding contracts between two or more parties.

Sensitive information provided during corporate transactions, partnerships, collaborations, or employment relationships is protected by these agreements. In other words, NDAs provide a contractual responsibility for the parties concerned to protect the confidentiality of the information and refrain from using or disclosing it without authorisation.

2. Types of NDAs

NDAs come in a variety of forms that are customised to different purposes and circumstances. The following are the two main groups:

  • Unilateral NDAs: In a unilateral NDA, the disclosing party shares private information with the receiving party. The recipient is obligated by law to keep the information private and not to misuse it.
  • Mutual NDAs: Also referred to as bilateral or reciprocal NDAs, mutual NDAs are utilised when two parties want to share confidential information. These agreements establish a mutual commitment for all parties to safeguard each other’s private information.

3. Key elements of an NDA

An NDA typically includes the following key elements:

  • Scope of agreement

The NDA should explicitly define the extent of the secret information that it protects, describing the categories of data or materials that are covered.

  • Obligations of parties

The NDA must outline the responsibilities and obligations of both the disclosing and receiving parties on the management, protection, and permitted use of sensitive information.

  • Time period of agreement

The NDA must indicate the duration for which the confidentiality obligations are in effect. Depending on the conditions, NDAs may have a specified period or extend indefinitely.

  • Operation and effect of agreement

The NDA should specify how the agreement functions, including the mechanisms for reporting breaches, resolving disputes, and the consequences of noncompliance.

4. Enforceability and consequences of breach

Non-Disclosure Agreements are legally binding contracts, and breaching them can have significant implications.

In the event that a party violates an NDA by exposing or abusing sensitive information, the damaged party may seek monetary penalties or injunctive relief in court. Enforcing NDAs may be difficult, and it frequently necessitates litigation to defend the rights and interests of the infringed party.

5. Use in diverse business relationships

NDAs are frequently utilised in a variety of commercial scenarios, not simply employer-employee relationships. These agreements are critical in protecting intellectual property, trade secrets, and sensitive information in partnerships, joint ventures, mergers and acquisitions, and third-party collaborations. Understanding their adaptability can help you use NDAs effectively in a variety of situations.


Non-Disclosure Agreements are essential instruments for protecting sensitive information in a variety of commercial interactions. Understanding the major aspects and ramifications of NDAs is critical for their proper application. Legal advice is important at the point when you draft and enter into an NDA to ensure that the NDA covers your needs sufficiently. Legal representation is also essential in the event of contractual disputes or breaches of NDAs.

If you find yourself in need of legal assistance in matters related to NDAs or commercial litigation, do not hesitate to get in touch with us today. Our commercial litigation services in Singapore can help you navigate complex legal issues, protect your rights, and seek appropriate remedies in the event of disputes or breaches.

Besides commercial litigation, DC Law LLC is also an expert in defamation law in Singapore. Doris Chia, our Managing Director, has over 30 years of experience and is a Fellow of both the Chartered Institute of Arbitrators and the Singapore Institute of Arbitrators.