Q&As

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

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Produced in partnership with Christopher Snell of New Square Chambers
Published on LexisPSL on 06/01/2017

The following Information Law Q&A Produced in partnership with Christopher Snell of New Square Chambers provides comprehensive and up to date legal information covering:

  • What are the implications of reducing the term of an NDA from five years to two years?
  • Confidential information
  • Term of an NDA
  • Non-contractual remedies
  • Other consequences
  • Further reading

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 promisor’s contractual obligation not to disclose information is limited in its time period (save to the extent tha

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