Types of Non-Disclosure Agreements (NDAs) Explained
Written By: Tabeth Mureya
Introduction
In today’s data-driven and partnership-focused business environment, sensitive information is frequently shared with employees, vendors, partners, and investors. To protect this information, organisations rely on Non-Disclosure Agreements (NDAs). Understanding the different types of non-disclosure agreements, when to use them, and how they function is essential for reducing legal and commercial risk.
Whether you are signing an NDA as an individual or a company, entering a partnership, or sharing confidential business data, choosing the correct NDA type ensures confidentiality obligations are clearly defined and enforceable.
Definition: What Is a Non-Disclosure Agreement (NDA)?
A Non-Disclosure Agreement (NDA) is a legally binding contract that restricts one or more parties from disclosing confidential information to unauthorised third parties.
NDA full form: Non-Disclosure Agreement
NDA meaning: A contract designed to protect sensitive or proprietary information
non-disclosure agreement abbreviation: NDA
What is an NDA agreement? A formal agreement that defines what information is confidential, how it may be used, and how long confidentiality applies
NDAs are also known as confidentiality agreements, secrecy agreements, or, in some cases, non-confidentiality agreements (though the latter is less common and context-specific).
Key Terms, Elements, and Clauses in an NDA
A legal non-disclosure agreement typically includes the following elements:
- Definition of Confidential Information
Clearly defines what information is protected and what is excluded.
- Obligations of the Receiving Party
Explains how confidential information may be used and stored.
- PermittedDisclosures
Outlines exceptions, such as disclosures required by law.
- Duration of the NDA
Answers the common question: How long is your NDA applicable?
- Parties to the Agreement
Specifies whether the NDA applies to individuals, companies, or both important when signing an NDA as an individual not a company.
- Remedies and Enforcement
Details consequences of breach, including injunctions or damages.
- Signatures and Execution
May include multi-signature NDAs, such as three-way NDAs or multilateral NDAs.
Types of Non-Disclosure Agreements (NDAs)
- Unilateral NDA (One-Way NDA)
A unilateral NDA, also called a one-way non-disclosure agreement, is used when only one party discloses confidential information.
Common use cases:
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- Employee NDAs
- Vendor confidentiality agreements
- Investor pitch discussions
- Bilateral NDA (Mutual NDA / Two-Way NDA)
A bilateral NDA agreement, also known as a mutual NDA, two-way NDA, or two-sided NDA, applies when both parties share confidential information.
Also referred to as:
-
- Two-way confidentiality agreement
- Bilateral confidentiality agreement
- 2-way NDA
Mutual NDA vs unilateral NDA: The key difference lies in whether confidentiality obligations apply to one or both parties.
- Multilateral NDA
A multilateral non-disclosure agreement involves three or more parties sharing confidential information.
Examples include:
-
- Three-way NDA
- 3-way non-disclosure agreement
- Joint ventures or consortium projects
This type reduces the need for multiple bilateral agreements.
- NDA Partnership Agreements
An NDA partnership is used when parties explore or enter strategic collaborations, mergers, or joint ventures.
Often paired with:
-
- Non-circumvention non-disclosure agreements
- Commercial term sheets
- Industry-Specific NDAs
Some NDAs are tailored to specific contexts, such as:
-
- Vendor confidentiality agreements
- Law firm NDAs
- Shipping or logistics NDAs (e.g. shipping NDA meaning, shipped NDA meaning)
When to Use an NDA
An NDA should be used whenever confidential information is disclosed, including:
- Business negotiations
- Employment relationships
- Vendor onboarding
- Product development
- Partnerships and investments
A standard non-disclosure form or short NDA may suffice for low-risk scenarios, while complex arrangements require a customised NDA.
Benefits of Using NDAs
Key advantages of NDAs include:
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- Protection of trade secrets and IP
- Reduced risk of data misuse
- Clear legal remedies in case of breach
- Increased trust between parties
- Defined confidentiality boundaries
NDAs help ensure all parties understand what is under NDA and how confidential data may be handled.
Common Risks and Challenges
Despite their usefulness, NDAs carry risks if poorly drafted:
- Overly broad confidentiality definitions
- Unclear duration clauses
- Weak enforcement provisions
- Confusion between NDAs and confidentiality agreements
- Failure to track signed NDAs
Understanding how does an NDA work is critical to avoiding unenforceable agreements.
NDA vs Other Agreements
NDA vs Confidentiality Agreement
Many ask about the difference between NDA and confidentiality agreement. In practice, they are often used interchangeably, though NDAs typically focus on non-disclosure, while confidentiality agreements may include broader obligations.
Mutual NDA vs Unilateral NDA
Mutual vs unilateral NDA depends on whether one or both parties disclose confidential information.
CDA and NDA
A CDA (Confidential Disclosure Agreement) is functionally similar to an NDA, with minor terminology differences.
Examples of NDAs in Different Industries
Technology
Used to protect software code, algorithms, and product roadmaps.
Legal Services
Law firm NDAs protect client information and case strategies.
Manufacturing
Protects designs, processes, and supplier data.
Logistics and Shipping
NDAs cover routing data, pricing, and client information (e.g. what does shipping NDA mean).
Startups and Investment
NDAs protect pitch decks, financials, and business models.
Managing NDAs with Contract Corridor
Managing multiple NDA types unilateral, bilateral, and multilateral NDAs can become complex without proper systems.
Contract Corridor simplifies NDA management by:
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- Centralising all NDA contracts
- Tracking NDA duration and expiry
- Managing multi-signature NDAs
- Linking NDAs to related contracts
- Ensuring compliance and audit readiness
With Contract Corridor, businesses gain full visibility into signed NDAs, obligations, and risk exposure.
Conclusion
Understanding the types of non-disclosure agreements (NDAs) is essential for protecting confidential information and maintaining trust in business relationships. Whether using a unilateral NDA, bilateral NDA agreement, or multilateral NDA, selecting the correct structure ensures confidentiality obligations are clear, enforceable, and aligned with business objectives.
By combining well-drafted NDAs with effective contract management through Contract Corridor, organisations can safeguard sensitive information while enabling collaboration and growth.
Protect your confidential information with the right NDA and full lifecycle visibility. Schedule a Demo to see how Contract Corridor simplifies NDA management, tracking, and compliance.