Intellectual property · Business law

NDA

[abbr. for ‘non-disclosure agreement’] contract that obliges one or both parties to keep exchanged information confidential and to use it only for the agreed purpose. NDAs are common before negotiations, cooperation projects and company sales. Breaches can be sanctioned by a contractual penalty.

In practice, NDAs are the most important protection for ideas and trade secrets. They are especially common before cooperation projects or funding rounds. Without a contractual penalty, a claim for damages usually fails because the amount of the loss can hardly be quantified. The penalty can be set at the reasonable discretion of the injured party or as a fixed amount. Under German law, a template that is used again and again counts as standard terms and, as such, is subject to review for enforceability by the courts. An NDA is one of the confidentiality measures required for protection as a trade secret, but it does not replace the others. To be effective, the confidential information must be identifiable.

By the way: you do not need an NDA to work with a lawyer. Lawyers are already bound by a statutory duty of confidentiality, which is backed by both the professional rules and criminal law.

Term 24 of 44 · As at 9 September 2026

Licence: CC BY 4.0*

How to cite: NDA, in: Berlin Online Glossary of German Business Law, published by STRUB.LAW, as at 9 September 2026, https://strub.law/en/glossary/nda/, CC BY 4.0

*This licence applies only to the written entries of the Berlin Online Glossary.

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