What is an NDA and why do I need one?

by GLS GROUP May 13, 2019


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What is an NDA?

Non-Disclosure Agreements (NDA) or Confidentiality Agreements allow businesses to co-operate by regulating the use of confidential information that parties may share in a controlled and safe manner as they seek to explore or engage in new projects. 

Despite its status as a “garden variety” legal document, most businesses complain that the NDA takes far too long to conclude, and many find that their NDAs fail to provide the protection they hoped for.

In this piece we will look at:

  • why the NDA is important
  • when to enter into an NDA
  • common NDA-related mistakes
  • how to create an NDA efficiently

Fortunately, all businesses globally may also try GLS’ world class 24/7 online contract automation experience to generate a world class NDA entirely for free and in minutes by clicking here thanks to GLS Legal Docs.  


Why is an NDA important?

The global economy has long since evolved into a data-driven construct where business information frequently delivers competitive advantages and is considered a key corporate asset, frequently accounting for much of the value of many businesses. 

The NDA assists businesses in maintaining a competitive advantage that could otherwise be jeopardised by the uncontrolled disclosure of information relating to that advantage – whatever that might be.

The NDA delivers critical legal protection that allows businesses to communicate more freely about their ability to work together to achieve desired outcomes, whether in relation to new contracts, joint ventures or mergers and acquisitions. 

When should I enter into an NDA?

Whilst the NDAs are the essential precursor for most types of business activity, the more commonly recognisable NDA scenarios include:

  • A new product - if secrets and details about a new product hit the market too soon, competitors are able to move to block its success.
  • A merger or acquisition - if discussions around a merger or acquisition come to light before the deal is done, the agreement could fall through and corporate laws pertaining to disclosure may end up being breached.
  • With external contractors – if you use external contractors it is essential that they are restricted from using your confidential information other than as you are prepared to authorise.

“Like the veritable genie in the bottle, regaining exclusive ownership and control over your confidential information once is it has been disclosed is a real challenge. Accordingly, GLS advocates a more holistic way of determining your need for an NDA.”


We recommend letting the nature of the information you are looking to disclose determine your requirement for an NDA. Consider asking the following types of questions:

  • does it contain any ideas that you have for your business?
  • would the owner of your business be happy if it was published on the Internet?
  • did you pay to develop the information or what it relates to?
  • could your competitors misuse it or derive benefit from your information?
  • does it relate to any of your products, services and internal operations?
  • does the information relate to the future plans of your business?

If you answer “yes” to any of the above, then you need to implement an NDA.

Interestingly, whilst NDAs are commonly used by large businesses, it is noteworthy that a smaller business and/or start-up frequently exist around the exploitation of a single competitive idea which if not protected, makes the business extremely vulnerable.   

non-disclosure agreement template online free

Common NDA Mistakes

Despite tens of thousands of NDAs being concluded each day, many NDAs fail to deliver the intended protections. Below is a list of common mistakes that are made in connection with an NDA and which should be avoided: 

  • Failing to define the scope of confidential material clearly or having an overly inclusive definition of 'confidential information'
  • Failing to designate the disclosed information as “confidential information”
  • Failing to consider whether a unilateral, bilateral or multilateral NDA is required
  • Failing to have the correct authorised signatory sign the NDA for your/their business
  • Failing to set out the precisely agreed-upon consequences that are to flow from the breach of the NDA
  • Failing to keep an electronic copy of the signed NDA
  • Failing to set out when or how disputes related to the NDA will be determined or the appropriate jurisdiction for resolving such disputes
  • Failing to limit the scope of what you are disclosing to the party who signed the NDA
  • Imposing provisions which are too onerous or restrictive and which a court might not enforce
  • Failing to impose clear limits on who may access the confidential information
  • Failing to recognise that obtaining financial compensation for the breach of an NDA, at least under English law, is a tough order


Generating an NDA efficiently

Understandably, the time it takes to negotiate an NDA, particularly in scenarios where their use is almost compulsory, represents a significant drain on the business’s resources and the legal team’s time. Legal teams must become far more productive.

Luckily, Global Legal Solutions has made it easy for businesses to create a well-constructed and enforceable NDA through the use of our online automated contracting solution – GLS Legal Docs.  Our NDA is available in English, Russian, Italian and Indonesian.


Unlike many online NDA templates, GLS Legal Docs interviews you online to obtain the particulars required to create a specific and valuable NDA agreement for both parties.

Our online document automation platform takes you through the same process you would experience with a lawyer to create a document that protects your business and your trade secrets.

The best news is that our online NDA creation tool is completely FREE! 

Creation of an NDA with a typical law firm could cost anywhere from a few hundred to a few thousand dollars. With Global Legal Solutions and our online NDA builder you can create any number of NDA documents for free. 

GLS also offers more than 70 other commonly required legal agreements that can be rapidly produced in a customised fashion to suit your requirements … and at a fraction of the time and cost of doing it yourself or using a traditional law firm. 

Generate your free NDA

GLS Group - Nominated by Financial Times as the:
"Most Innovative Law Firm - Asia Pacific"
Innovation through Technology 
The Middle East Legal Awards 2020

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