Entrepreneur Legal UK · Insight
When Should a UK Business Use an NDA?
By Gabriel C. Mbanefo — Solicitor of England and Wales; Director, Entrepreneur Legal Ltd.
When an NDA may be appropriate
| Situation | Use an NDA? | Key point |
|---|---|---|
| Exploring a commercial partnership | Often | Define the permitted purpose before detailed information is shared. |
| Sharing a potentially patentable invention | Usually, before disclosure | Public disclosure can damage patent novelty; manage timing carefully. |
| Sending a high-level investor pitch | Not always | Many investors will not sign NDAs at an early stage; disclose in layers. |
| Both parties exchange sensitive information | Often mutual NDA | Mutuality should reflect the real information flow, not be automatic. |
| Employee whistleblowing or protected disclosure | An NDA cannot override protected disclosures | ERA 1996 s43J (Great Britain) and Employment Rights (NI) Order 1996 Art 67J (Northern Ireland); sexual harassment is expressly covered under GB protected-disclosure law from 6 April 2026, subject to statutory conditions. |
| Victim disclosures about relevant criminal conduct | Special statutory limits apply | Section 17 VPA 2024: qualifying England-and-Wales NDAs signed from 1 Oct 2025; additional CICA and related court/tribunal exceptions apply to NDAs signed from 12 Dec 2025. |
The founder problem: “we signed an NDA” is not the same as “the information is protected”
A founder shares a roadmap, pricing model and customer pipeline with a proposed distributor. The parties sign a short NDA. Months later, the information has circulated through the distributor’s group and advisers. The agreement does not clearly define the protected information, the permitted purpose or who may receive it. The existence of the NDA is not the end of the analysis. What matters is what it covers, how the information was handled and what the recipient was actually allowed to do.
1. Use the NDA before disclosure where possible
IPO guidance recommends putting confidentiality arrangements in place before ideas or information are shared. That matters particularly for information linked to an invention because premature public disclosure can jeopardise patent novelty. If information has already been disclosed, a later agreement may still regulate future use and disclosure, but it cannot recreate the factual secrecy that existed before the disclosure.
2. Define confidential information with enough precision to operate
An NDA should identify the categories of information that matter without making the definition so broad that the recipient cannot tell what is protected. Depending on the deal, this may include code, technical know-how, commercial strategy, supplier terms, pricing, forecasts, customer information, security architecture, test results or non-public IP.
Common exclusions usually address information already lawfully known to the recipient, information that becomes public without breach, information independently developed without using the protected material, and information lawfully obtained from a third party without confidentiality restriction.
3. The permitted purpose is often more important than the headline confidentiality promise
A recipient can keep information secret and still misuse it. For example, a manufacturer could keep a product plan confidential but use it to design around the founder or price negotiations more aggressively. A well-drafted NDA therefore restricts use as well as disclosure. The permitted purpose should be narrow enough to match the transaction, such as evaluating a proposed distribution relationship or carrying out acquisition due diligence.
4. Trade-secret protection depends on reasonable steps, not just contract wording
The Trade Secrets (Enforcement, etc.) Regulations 2018 define a trade secret by reference to secrecy, commercial value because it is secret, and reasonable steps taken to keep it secret. An NDA can be one of those reasonable steps, but it should sit alongside access controls, need-to-know permissions, secure data rooms, document marking, internal policies and disclosure records.
A company that publicly posts the same information or shares it indiscriminately cannot assume a broad NDA will cure the operational weakness.
5. One-way or mutual?
Use a one-way NDA where only one party is expected to disclose protected information. Use a mutual NDA where both sides genuinely expect to disclose. A mutual NDA can create unnecessary obligations if the information flow is actually one-directional. Execution formalities and consideration also deserve attention in stand-alone or retrospective arrangements.
6. Who may receive the information?
Commercial counterparties often need to disclose information internally or to professional advisers. The NDA should identify permitted recipient categories and the standard of confidentiality expected. Do not simply assume every adviser, group company or contractor is automatically subject to an equivalent duty.
7. How long should confidentiality last?
There is no universal three-year or five-year rule. The duration should reflect the information and transaction. Ordinary commercial information may lose sensitivity over time; trade secrets and non-patentable know-how may remain valuable only while they stay secret. It can be useful to distinguish the agreement term from the survival period for confidentiality obligations.
8. Some disclosures cannot be contractually blocked
For Great Britain, section 43J of the Employment Rights Act 1996 makes an agreement provision void to the extent that it purports to prevent a worker making a protected whistleblowing disclosure. Northern Ireland has the corresponding protection in Article 67J of the Employment Rights (Northern Ireland) Order 1996. Since 6 April 2026, qualifying disclosures relating to sexual harassment have been expressly included in the Great Britain protected-disclosure framework by section 23 of the Employment Rights Act 2025. The applicable statutory conditions still matter; an NDA must not be treated as a universal ban on reporting or protected disclosures.
In England and Wales, section 17 of the Victims and Prisoners Act 2024 restricts enforcement of qualifying NDAs against victims, or people who reasonably believe they are victims, making specified disclosures about relevant criminal conduct to permitted recipients for permitted purposes. The principal rule applies to NDAs signed on or after 1 October 2025. The additional exceptions for disclosures to the Criminal Injuries Compensation Authority (CICA) and to courts or tribunals challenging relevant CICA decisions apply to NDAs signed on or after 12 December 2025. Those exceptions do not create a general right to publish business secrets and do not invalidate the entire NDA.
Recent and forthcoming NDA restrictions
The Employment Rights Act 2025 introduced further changes. Since 6 April 2026, the Great Britain whistleblowing regime expressly covers qualifying disclosures about sexual harassment. Separately, section 24 provides for additional restrictions on workplace confidentiality terms concerning harassment and discrimination, but the substantive wider NDA reforms are scheduled for 2027 and should not be presented as generally in force now. The commencement position and any implementing regulations should be checked when drafting or signing workplace-related terms.
9. An NDA does not transfer IP ownership
Confidentiality and ownership are different legal jobs. An NDA can limit use and disclosure, but it does not by itself transfer copyright, trade marks, designs, inventions or other IP. If the commercial deal requires ownership to move, use the appropriate assignment or other transfer documentation as well.
Common NDA mistakes and consequences
| Mistake | Practical consequence |
|---|---|
| Signing after the key disclosure | The business may already have lost practical control or patent-sensitive secrecy. |
| Using an undefined “all information” clause | The recipient may not know what is protected, and enforcement becomes harder to analyse. |
| No permitted-purpose restriction | The recipient may argue it kept the information confidential while using it for an unintended commercial purpose. |
| No representative/affiliate controls | Information can spread beyond the people the founder expected to receive it. |
| Assuming the NDA creates a trade secret | Trade-secret status still depends on secrecy, commercial value and reasonable protective steps. |
| Drafting around whistleblowing/crime-reporting rights | The clause may be void or unenforceable to the relevant extent and create reputational risk. |
How StartWise® Drafting fits
For a reasonably standard confidentiality arrangement, StartWise® can help with the drafting step. Choose the NDA, answer guided questions, generate a tailored first draft and review any Drafting Notes. Drafting Notes can highlight assumptions, choices to confirm and implementation points, but they are not legal advice and do not guarantee that the NDA fits every disclosure or jurisdiction.
Prefer a static editable NDA template?
For a straightforward England-and-Wales arrangement, Entrepreneur Legal UK also offers Unilateral NDA (UK) and Mutual-NDA (UK) downloadable templates with drafting tips through Etsy. A one-way template suits one-directional disclosure; a mutual template suits genuinely two-way disclosure. This is a secondary, self-editing route for a business that already knows the appropriate agreement, disclosure purpose and parties. Unlike StartWise® Drafting, a static template does not use guided questions to prepare a tailored first draft. The tips are not legal advice or solicitor review. Verify the exact Etsy listing links before publishing; no static template can override protected disclosures or replace appropriate advice for unusual, high-value or legally sensitive matters.
Use legal support where the information is exceptionally valuable, patent-sensitive, already disclosed, subject to a public-authority/FOI context, connected to alleged wrongdoing, governed by unusual foreign law or likely to require urgent enforcement.
Frequently asked questions
Do I need an NDA before every business conversation?
No. Use it selectively where genuinely sensitive information needs to be shared and the recipient does not already owe an adequate confidentiality duty.
Will an investor sign an NDA?
Some may, but many professional investors will not sign an NDA for an early-stage pitch. Founders often need staged disclosure rather than assuming an NDA will be available.
Does an NDA make information a trade secret?
No. Trade-secret status depends on the statutory criteria, including reasonable steps to keep the information secret.
Can an NDA stop whistleblowing?
No. In Great Britain, section 43J of the Employment Rights Act 1996 prevents contractual terms from barring protected disclosures; Article 67J of the Employment Rights (Northern Ireland) Order 1996 provides a corresponding rule in Northern Ireland. Since 6 April 2026, qualifying sexual-harassment disclosures are expressly included in the Great Britain regime.
Can an NDA transfer intellectual property?
Not merely by being an NDA. If ownership must move, the agreement needs effective assignment language or a separate transfer document that satisfies the applicable formalities.
Should confidentiality last forever?
Not automatically. Duration should reflect the nature of the information. Some trade secrets may justify obligations linked to the period they remain genuinely secret.
Author, legal-review and update information
Author / reviewer: Gabriel C. Mbanefo — Solicitor of England and Wales; Director, Entrepreneur Legal Ltd. Author/legal-review profile: https://uk.entrep.legal/about/ (confirmed 16 Oct 2026).
Planned publication date: 3 November 2026.
Current source-check date: 16 October 2026 (principal official-law, commencement and UK product sources).
Jurisdiction statement: General UK information. Trade-secret rules have UK-wide application; protected-disclosure provisions differ in Great Britain and Northern Ireland. Victims and Prisoners Act 2024 s17 applies to England and Wales. Not legal advice.
Sources and related Entrepreneur Legal resources
- Intellectual Property Office: Non-disclosure agreements.
- Trade Secrets (Enforcement, etc.) Regulations 2018.
- Employment Rights Act 1996, section 43J.
- Victims and Prisoners Act 2024 NDA guidance for businesses.
- Government Office for Technology Transfer: KAM Guide, IP in agreements.
- Employment Rights Act 2025 (sections 23–24) and commencement regulations 2026 (legislation.gov.uk).
- Employment Rights (Northern Ireland) Order 1996, Article 67J (legislation.gov.uk).
- Ministry of Justice: Victims and Prisoners Act 2024 business NDA guidance, updated December 2025 (gov.uk).
- Government ERA 2025 implementation timetable: further workplace NDA measures planned for 2027 (gov.uk).
- Entrepreneur Legal UK Commercial Agreements.
- Entrepreneur Legal UK Etsy Mutual-NDA (UK) and Unilateral NDA (UK) with drafting tips — exact listing URLs to be verified before publication.
Choose the right next step
Draft through StartWise. Review for less.
Explore the current guided UK documents, or contact Entrepreneur Legal UK where your matter requires review, consultation or bespoke support.
