Non-Disclosure Agreements

A non-disclosure agreement, often called an NDA or a confidentiality agreement, is a contract in which one party or both parties agree not to use or share specific information outside the purpose it was disclosed for. Signing one gives the business a contractual right to sue for damages, and in some cases to seek an injunction, if the other party misuses or discloses what it agreed to protect.

Fisher Stone drafts and reviews non-disclosure agreements for New York business owners meeting with investors, hiring contractors, or sharing confidential information with a potential partner or manufacturer, for a flat fee, quoted up front before any work begins. A licensed New York attorney handles your matter from start to finish, reachable by call, email, or text. No call centers, no handoffs to junior staff.

What an NDA protects

An NDA works by defining a category of information as confidential and prohibiting the party who receives it from using it for anything other than the purpose it was disclosed for. The information at stake varies by business and by deal, but it typically falls into a few recurring categories: customer and client lists, pricing and cost structures, formulas and manufacturing or operational processes, source code and technical specifications, business plans and financial statements, and the terms of supplier or vendor agreements.

Much of this information does not qualify for patent or copyright protection on its own. An NDA gives a business a contractual claim against anyone who misuses it, letting the business share what a deal, a hire, or a partnership requires without losing control over it.

One-way and mutual NDAs

An NDA can run in one direction or both, and the right structure depends on who is actually sharing sensitive information.

One-way (unilateral) NDAs

In a one-way NDA, only one party discloses confidential information and the other party agrees to protect it. This fits situations where the flow of information is genuinely one-sided: a business owner describing proprietary processes to a contractor, or a company sharing product designs with a manufacturer that is not sharing anything comparable back.

Mutual (bilateral) NDAs

In a mutual NDA, both parties disclose confidential information to each other and both agree to protect what they receive. This fits negotiations where each side needs to see the other’s numbers, such as two companies discussing a merger, a joint venture, or a partnership.

What makes an NDA enforceable

Courts do not enforce every agreement labeled an NDA. A handful of terms determine whether the agreement holds up if a dispute reaches a courtroom.

A clear, specific definition of confidential information

The agreement has to say what is actually covered, in language specific enough that both sides can tell what it applies to. A definition tied to specific categories or marked documents is easier to enforce than one that tries to cover everything the recipient learns during the relationship with no limits at all.

Permitted uses

The NDA should state what the recipient is allowed to do with the information, usually limited to evaluating the deal, performing the work, or whatever purpose the disclosure was for, and nothing beyond that.

Standard carve-outs

Every well-drafted NDA excludes certain categories from the confidentiality obligation, since restricting information that was never truly secret is both unreasonable and hard to enforce. The standard carve-outs cover information that is already public, or becomes public later, through no fault of the recipient; information the recipient already knew or independently develops without relying on what was disclosed; information lawfully received from someone else with no duty of confidentiality; and information the recipient is required to disclose by law, subpoena, or court order.

Duration

The agreement should state how long the confidentiality obligation lasts, whether that is a fixed term of years or, for certain categories such as trade secrets, for as long as the information stays secret.

Return or destruction of materials

The NDA should require the recipient to return or destroy confidential documents, files, and copies once the relationship ends or on request, and to confirm in writing that it has done so.

Remedies

The agreement should spell out what happens if it is breached, including the right to seek an injunction, a court order stopping further use or disclosure, in addition to damages. Money alone often cannot undo the harm of a trade secret or a customer list reaching a competitor, which is why injunctive relief matters.

Why an unlimited or overbroad NDA is harder to enforce

An NDA with no end date, or one that defines confidential information so broadly that it covers what the recipient already knew or could learn anywhere, gives a court reason to question whether the restriction is reasonable. Courts ask whether the obligation is tied to a specific, identifiable business interest, and whether its scope and duration are proportionate to that interest. A well-drafted NDA limits both to what the business is actually trying to protect, which is what makes it hold up if a dispute reaches court.

Situations that call for an NDA

A handful of recurring situations lead New York business owners to ask for an NDA before a conversation goes any further.

• Talking to an investor or buyer. Before sharing financials, a cap table, or a business plan with someone considering an investment or preparing to buy the business, an NDA limits what they can do with what they see if the deal falls through.
• Hiring a contractor or agency. A freelancer, marketing agency, or outside developer often needs access to customer data, branding, or source code to do the work. Where that person also signs a broader employment or independent contractor agreement, the confidentiality terms are often built into that document instead of a standalone NDA.
• Evaluating a partnership. Two businesses exploring a joint venture typically exchange financial and operational information before either side commits, which calls for a mutual NDA rather than a one-way one.
• Sharing designs with a manufacturer. A product company sending drawings, specifications, or prototypes to a manufacturer, especially one overseas, needs the manufacturer bound to confidentiality before the designs leave the building.

NDAs and trade secret protection

A non-disclosure agreement is a contract. Trade secret law is a separate, broader body of law that can protect formulas, processes, customer lists, and other business information for as long as a business treats it as secret and takes reasonable steps to keep it that way. An NDA is one of those steps. Courts look at whether a business actually restricted access to sensitive information before treating it as a protectable trade secret, and a signed confidentiality agreement is common evidence of that effort.

An NDA is most effective alongside practical safeguards: limiting who inside the company can access sensitive files, marking confidential documents clearly, using access controls on shared drives and code repositories, and reminding departing employees or contractors of their ongoing obligations.

Fisher Stone drafts and reviews non-disclosure agreements as part of our broader contracts practice, and our contract drafting and review service covers the other agreements a growing business signs on both sides of the table. For the full range of services we handle for New York business owners, see our running a business page, or return to the Business Law hub.