Key non-disclosure agreement terms
Definitions of some of the key terms in a non-disclosure agreement
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 are 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.
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