Non-disclosure agreements

Key non-disclosure agreement terms


Certain terms are likely to crop up in non-disclosure agreements (NDAs). It is a good idea to understand these terms and their definitions.

Term What is it?
Confidentiality A legal principle that maintains secrecy between parties.
Owner or discloser The name of the person, organisation or business disclosing the information.
Recipient The name of the person, organisation or business that is receiving the information and that is responsible for ensuring its confidentiality.
Statement of reasons A short paragraph defining the context in which the information will be disclosed and why the parties want to make the information the subject of a contract.
Subject The information and documents that will be the subject of the confidentiality agreement.
Penalty clause An optional way of fixing an amount of compensation that the owner or discloser is paid if the recipient breaches the agreement.
Confidentiality clause An optional clause that requires both parties to keep the existence of the confidentiality agreement a secret.
Term of agreement How long the obligations of the contract last for.

Read more about negotiating the terms of a non-disclosure agreement.