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How to Create an NDA (Non-Disclosure Agreement) — Free Template

By DocFila Team · February 13, 2026 · 6 min read

A Non-Disclosure Agreement (NDA) is one of the most common legal documents in business. Sharing a business idea with a potential partner, hiring a contractor, exploring a merger — an NDA protects your confidential information from being disclosed without authorization. This guide explains what an NDA includes, when you need one, and how to create one.

What Is an NDA?

An NDA — also called a confidentiality agreement, proprietary information agreement, or secrecy agreement — is a legally binding contract between two or more parties. It establishes that certain information shared between the parties will remain confidential and will not be disclosed to third parties without consent.

NDAs are used in virtually every industry: technology, healthcare, finance, entertainment, manufacturing, and professional services. They are standard practice before discussing trade secrets, proprietary processes, client lists, financial data, product roadmaps, or any information that gives a business its competitive edge.

Mutual vs. Unilateral NDAs

There are two primary types of NDAs, and choosing the right one depends on who is sharing confidential information:

Unilateral NDA (One-Way)

One party (the "Disclosing Party") shares confidential information with another party (the "Receiving Party"), who agrees not to disclose it. This is common when:

• A company shares proprietary information with a new employee
• A startup pitches an idea to an investor
• A business hires a freelancer or consultant

Mutual NDA (Two-Way)

Both parties share confidential information with each other, and both agree to protect the other's information. This is typical in:

• Joint venture discussions
• Partnership negotiations
• Merger and acquisition due diligence
• Technology licensing discussions

When in doubt, use a mutual NDA — it protects both sides and is generally more balanced.

Key Clauses Every NDA Should Include

A well-drafted NDA addresses these essential elements:

1. Identification of Parties

Clearly identify all parties by full legal name and address. Specify whether the NDA is unilateral or mutual — this defines who has obligations under the agreement.

2. Definition of Confidential Information

This is the most important clause. It defines exactly what information is considered confidential. Be specific rather than vague. Common categories include:

• Business plans and strategies
• Financial data and projections
• Customer and supplier lists
• Trade secrets and proprietary processes
• Software source code and algorithms
• Product designs and specifications
• Marketing strategies and research

Also define what is not confidential — typically information that is already public, independently developed, or received from a third party without restriction.

3. Obligations of the Receiving Party

Specify what the receiving party must do — and must not do — with the confidential information:

• Use the information only for the stated purpose (e.g., evaluating a potential partnership)
• Not disclose the information to any third party without written consent
• Take reasonable measures to protect the information (at least the same care they use for their own confidential information)
• Limit access to employees or advisors who need to know, and ensure those individuals are also bound by confidentiality

4. Term and Duration

Specify how long the NDA remains in effect. This typically includes two timeframes:

• Agreement term: How long the parties will be sharing information (e.g., 12 months from the effective date).
• Confidentiality period: How long the confidentiality obligations survive after the agreement ends (commonly 2–5 years, or indefinitely for trade secrets).

5. Permitted Disclosures

Include exceptions for legally required disclosures — for example, if a court order or regulatory agency compels disclosure. The receiving party should be required to give notice to the disclosing party before making such a disclosure, when legally permitted.

6. Remedies for Breach

Describe the consequences of violating the NDA. Common provisions include:

• Injunctive relief (a court order to stop the breach)
• Monetary damages (actual damages suffered due to the breach)
• Acknowledgment that a breach may cause irreparable harm

7. Return or Destruction of Materials

Require that upon termination of the agreement, the receiving party returns or destroys all confidential materials — physical documents, digital files, copies, and notes.

8. Governing Law and Jurisdiction

Specify which state or country's laws govern the agreement and where disputes will be resolved. This is critical in cross-border agreements.

When Do You Need an NDA?

Consider using an NDA whenever you are sharing sensitive information in a business context:

• Hiring employees or contractors who will access proprietary systems or data
• Pitching investors on a business idea or product concept
• Entering partnerships where both sides share strategic information
• Licensing technology or intellectual property
• Selling a business — potential buyers need access to financials and operations data
• Engaging consultants for strategic advice, audits, or product development

How to Create an NDA With DocFila

DocFila's NDA Builder walks you through a mutual or one-way NDA, which you can customize, export as a PDF and send for signature:

1. Open DocFila and navigate to Contract Templates.
2. Select the NDA template — choose mutual or unilateral based on your situation.
3. Fill in the details. Enter party names, define confidential information, set the term, and customize clauses as needed.
4. Review the document. Read through the generated NDA carefully. The wording is plain and general, so check that it fits your situation.
5. Sign electronically. Use DocFila's E-Signature tool to sign the NDA and send it to the other party for countersignature.
6. Store securely. The signed NDA is saved in your Secure Vault with encryption.

Important Disclaimers

DocFila's NDA Builder is provided for informational and convenience purposes. It does not constitute legal advice and has not been reviewed for your jurisdiction or situation. For high-stakes situations — such as multi-million dollar deals, cross-border agreements, or situations involving regulated industries — consult a qualified attorney to review or draft your NDA.

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