Texas Non-Disclosure Agreement: What Is It? (2026)

What Is a Non-Disclosure Agreement Under Texas Law?

Technically, Texas non-disclosure agreements aren’t expressly defined in state law. However, common practice treats any contract that restricts a party from disclosing information as an NDA.

So what is an NDA exactly? An NDA is a binding contract in which parties agree not to use or share proprietary or sensitive information. They can be appropriate documents, for example, when onboarding a new employee who will have access to company data, or when collaborating with contractors or manufacturers.

Types of NDAs Recognized in Texas

Texas NDAs are typically mutual or unilateral. The primary difference between a mutual vs. unilateral NDA is how many parties promise to keep information confidential. A mutual NDA requires two or more parties to maintain confidentiality, while a unilateral NDA only requires one party to remain silent.

It’s also possible to encounter multilateral NDAs, which involve three or more parties. Instead of preparing an NDA for each party involved, which can take time and could be costly, a company may cover a number of people with one document.

There are specialized variations of NDAs in Texas, too. One of these variations is an employee confidentiality agreement, which prevents employees from using or sharing proprietary information they learned during their employment.

Another type is a non-circumvention agreement, which prevents the receiving party from using the information to bypass the disclosing party and going right to their clients.

You can also categorize NDAs by their subject matter. NDAs can be used to prevent the disclosure of any sensitive, secret or proprietary information.

For example, a malpractice insurer might include an NDA in a medical malpractice settlement. The purpose of a Texas non-disclosure agreement in this situation would be to prevent the victim from disclosing what the doctor did to them and how much the insurer paid them for their injuries.

Key Elements and Legal Requirements for a Valid Texas NDA

Enforceability of any contract depends on these key elements:

• Mutual assent
• Consideration
• Reasonably clear obligations

Mutual assent means that both parties voluntarily agreed to the NDA. One party cannot simply impose NDA terms on the other. Consideration means that both parties promised to do something. In an NDA, at least one party promises not to disclose information.

The terms must be clear. A common dispute over NDAs occurs when the contract vaguely describes the protected information. It’s also important to outline the consequences of breaching the contract. Clearly stating who will pay the legal fees if a dispute arises and how that dispute will be addressed can prevent confusion later on.

The time limit of the NDA should be included as well. If there is no limit and the recipient of the information must maintain confidentiality until the information becomes public, that, too, must be spelled out.

How to Write and Execute an NDA in Texas

To draft an enforceable NDA, make sure to identify all parties in the document, along with the promises made. Specify the protected information, and make sure the restrictions on that information are clear.

Finally, both parties should sign the agreement after reviewing it with their legal advisors. The signatures prove mutual assent.

Enforcing an NDA and Remedies for Breach in Texas

So are NDAs enforceable in Texas? Some are unenforceable in the state, but not all. State law specifically prohibits NDAs from covering up sexual abuse. This law applies to all NDAs, including employment agreements and settlement agreements.

Additionally, any NDA that restricts businesses must be reasonable in time and scope. Thus, an NDA might be invalid if it covers all information learned from a company during contract negotiations, even if it was otherwise publicly available. Comparable enforceability standards also exist in states such as New York, where NDAs that impact trade or commerce must be narrowly tailored and reasonably necessary to protect a legitimate business interest. Texas applies the same reasonableness test to other restrictive covenants – non-competes are enforceable there only when they are ancillary to a valid agreement and limited in time, geography and scope.

Other NDAs would be enforced by filing a lawsuit. If a party wins a lawsuit, a judge can award damages and an injunction ordering the other party to refrain from disclosing the protected information.

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