Q&As

What are the implications of reducing the term of an NDA from five years to two years?

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Published on: 06 January 2017
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confidential information

Confidential information is a valuable asset of any business and is therefore commonly protected from misuse and abuse. It is, therefore, common for businesses to enter into confidentiality agreements (also known as non-disclosure agreements (NDAs)) in order to protect the misuse of such a valuable asset.

Term of an NDA

It is common for the term of an NDA to be limited to three to five years. See IPO Guidance Non-disclosure agreements, under the heading ‘2. What to consider’.

The best way to protect confidential information is to not disclose it.

Clearly, the most serious implication of the reduction of the term of a non-disclosure agreement, so that the obligation not to disclose only lasts for two years rather than five, is that the

Christopher Snell
Christopher Snell

New Square Chambers

Advice and representation in all areas of commercial and chancery litigation.

Instructed on behalf of both retail and investment banks [including BNY Mellon; HSBC; Royal Bank of Scotland] in relation to a variety of commercial issues.

Retained in relation to a wide range of international disputes; including disputes in the Bahamas; Isle of Man; BVI and Kuwait.

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Jurisdiction(s):
United Kingdom
Key definition:
Confidential information definition
What does Confidential information mean?

Information provided to the council by a government department upon terms forbidding its public disclosure and information prohibited from public disclosure by statute or court order (section 100A(3) Local Government Act 1972).

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