NDA Template: Tools For Non-Disclosure Agreements (2026)

What Is a Non-Disclosure Agreement (NDA)?

NDAs are contracts that aim to limit the spread of protected or confidential information. The restriction is generally enforceable through a lawsuit.

You may wonder: What is confidential information, and why does it need to be protected with a legal document? Broadly speaking, confidential information may include anything that a person or business entity doesn’t intend to be public, such as:

• Personal medical information
• Trade secrets
• Business plans or strategies
• Non-public financial information

In the business world, NDAs are frequently used to prevent certain parties, like consultants or employees, from sharing information with competitors. The idea is that leaking this information could seriously damage the company’s revenue by giving competitors an unfair advantage.

Types of Non-Disclosure Agreements

NDAs typically bind one or both parties. A unilateral NDA blocks one party from disclosing information, while a mutual NDA prevents multiple parties from disclosing information. Thus, the difference between a mutual vs. unilateral NDA is which party promises to preserve the information’s secrecy and whether any party promises something other than their silence.

When Are Unilateral NDAs Commonly Used?

Unilateral NDAs are typically used when only one party is sharing confidential information. For instance, high-level employees often gain access to an employer’s trade secrets or business plans, so any executive employment agreement is likely to include an NDA.

Similarly, if a startup is making a pitch to investors, it might require them to sign a unilateral NDA.

When Are Mutual NDAs Commonly Used?

If both people (or businesses) signing the agreement are sharing possibly sensitive information, the NDA will likely need to cover both parties. For example, companies that collaborate on business ventures might need to discuss trade secrets and other information that may be financially valuable.

In a mutual NDA, both parties agree not to share each other’s protected information. If one party violates the agreement, they might face legal action or have to pay the other damages.

What to Include in an NDA Template

To be a valid contract, an NDA template should include these elements:

• Mutual assent, typically signified by an offer that is voluntarily accepted
• Consideration in the form of each party’s promises
• Capacity, meaning that the parties were legally competent to form a contract
• Legality, meaning that the subject matter of the contract was legal

Your template should include blank fields where the parties’ names can be entered to show mutual assent. The parties will fill in the promises they make, including a clear description of the information that cannot be disclosed. The contract should also list any promises other than confidentiality, such as a monetary payment or employment.

Capacity is based on the parties’ ages and mental competence. A contract template might state that both parties were competent, but this statement is only effective if the parties, in fact, had the legal capacity to enter into a contract.

Legality varies from state to state. Some states allow NDAs to cover any information. However, some states restrict the subject matter of NDAs. For example, Vermont employment law prohibits employers from requiring workers to sign contracts that block them from disclosing sexual harassment.

How to Create a Non-Disclosure Agreement

Make sure your NDA template covers the following:

• Duration and scope
• What information is protected
• Identification of parties
• Remedies for a breach

You can also prepare an NDA template with a lawyer’s assistance to reuse for a broader purpose. For example, a company could have a standard NDA template that it uses with all new hires.

It’s important to note that laws surrounding NDAs can vary drastically between states. For instance, several states, including California and Washington, place strict limitations on NDAs, especially those concerning workplace harassment. Other states, such as Alabama, Alaska and Mississippi, have far fewer employee protections.

Are NDAs Enforceable?

NDAs are enforceable if they are valid and legal. If the party violates the NDA's provisions, the other party can file a lawsuit that can result in an award of compensatory damages. A court can also order the breaching party to refrain from any further disclosures.

Drafting an NDA Template With ConsumerShield

An NDA template can save time and reduce the risk that you draft an invalid or unenforceable contract. For help with drafting yours, explore ConsumerShield’s online tools and resources today.