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Overview of the One-way confidentiality agreement

Protect the confidentiality of business information with this one-way non-disclosure agreement (NDA). Also known as a confidentiality agreement, this document offers protection when a business wants to disclose information to another business but needs to make sure that the information goes no further. This NDA allows you to get to know each other better so you can decide whether to enter into a longer deal or partnership.

Use this one-way confidentiality agreement

  • when you want to share confidential information with another business (or individual)
  • to impress upon the other party the value of your confidential information
  • to impose restrictions on use and disclosure of the confidential information
  • to impose requirements about protection of your confidential information

This one-way confidentiality agreement covers

  • definition of confidential information
  • protection of confidential information
  • what confidential information it can be used for
  • who is allowed to receive confidential information
  • disclosures required by law
  • ending the agreement
  • remedies if there is a breach of confidentiality

A one-way confidentiality agreement (or unilateral non-disclosure agreement) covers situations where only one party is disclosing confidential information, and one party is receiving it. It is a legal contract that offers protection to the party disclosing confidential information and imposes restrictions to the party receiving it.

Common situations where you may need to use a unilateral NDA include:

  • bringing in a consultant
  • talking to potential partners or
  • hiring an employee

Asking the other party to sign an NDA protects any sensitive information you may share. A unilateral NDA protects this information by stating that anything confidential that is shared by the disclosing party will not be disclosed by the receiving party (except in prescribed circumstances) and if it is shared, then there will be reparations eg damages.

Almost any type of information can be confidential information. You can protect both commercial information and personal information. Examples of confidential information include trade secrets, patents, products designs, data bases, recipes, drawings, client's information or lists etc.

When drafting a one-way confidentiality agreement, you must state the purpose for which the confidential information is being disclosed to the receiving party. This is also called the 'permitted purpose'. The purpose of disclosing the information must be legitimate and for specific reasons. You must describe the purpose of disclosure as clearly as possible, eg for the purposes of exploring a joint venture between the parties.

Information is not deemed to be confidential if it:

  • is already known to the party receiving the confidential information prior to disclosure
  • is known to the public
  • comes into the possession of the receiving party from a third party who did not violate any contractual or legal obligations himself by disclosing this information
  • is required to be disclosed by law or rules of any court

The period of time for which each party must keep the information confidential will vary depending on the circumstances. Confidentiality agreements can be terminated immediately by giving notice in writing or can automatically terminate (after 1, 3 or 5 years if creating a Rocket Lawyer NDA). You should set a realistic time period for the duration of the agreement as information can lose its confidential character or commercial value over time.

The remedies available for breaching a confidentiality agreement are proportionate to the wrong done. A successful claimant in an action for misuse of confidential information is entitled to a percentage of profits that have resulted from the misuse of information, damages and, or injunction.

Ask a lawyer for:

  • advice if any of the parties are based outside England and Wales

This confidentiality agreement is governed by the law of England and Wales.

Other names for One-way confidentiality agreement

One-way non-disclosure agreement.