One-Way NDA vs Mutual NDA in London: What Local Businesses Need to Know

An NDA — a non-disclosure agreement, also called a confidentiality agreement — is a contract that stops the people you share sensitive information with from passing it on or misusing it. The practical choice most businesses face is between a one-way NDA, where only one side discloses confidential information and only the other side is bound to keep it secret, and a mutual NDA, where both sides share information and both are bound. The right choice is simply a question of who is actually sharing secrets: if the information only flows one way, use a one-way NDA; if both parties will reveal confidential material, use a mutual one. This guide explains the difference in full, what every NDA must contain to be worth signing, whether NDAs actually work, and the important 2025 change to the rules on NDAs with staff.

What an NDA is

A non-disclosure agreement is a legally binding contract in which one or more parties agree to keep specified information confidential and to use it only for an agreed purpose. It does two jobs: it creates a clear legal obligation of secrecy (so a breach is a breach of contract you can act on), and it puts the other side on notice about exactly what is confidential and what they may and may not do with it. NDAs are used constantly in business — before pitching to investors, briefing freelancers and suppliers, exploring acquisitions, sharing product roadmaps, or hiring senior staff. There is no register and no fee; an NDA exists simply because the parties sign it.

One-way (unilateral) NDA

A one-way NDA — also called a unilateral NDA — is used when only one party will disclose confidential information and only the other party is bound to protect it. The discloser shares; the recipient promises secrecy. This is the right structure whenever the information flows in a single direction. Typical situations include a founder pitching a business idea or financial model to a potential investor, a company sharing designs or specifications with a manufacturer or freelancer, or an employer giving a new hire access to confidential systems. Because only one side has obligations, a one-way NDA is simpler and is usually preferred by the disclosing party, who wants maximum protection without taking on confidentiality duties of their own.

Mutual (bilateral) NDA

A mutual NDA — also called a bilateral or two-way NDA — is used when both parties will exchange confidential information and both are bound to protect what they receive. The obligations run in both directions. This is the natural choice whenever two businesses are exploring something together: a merger or acquisition where each side reviews the other’s figures, a joint venture or partnership, a technology integration where both share roadmaps and code, or a supplier relationship where commercial terms and processes are revealed both ways. Mutual NDAs are generally seen as more balanced and are easier to get signed quickly, because neither party is asking the other to accept obligations it is not taking on itself.

One-way vs mutual: at a glance

How to choose between them

The decision is almost always answered by one question: will both sides be sharing confidential information, or just one? If you are the only one revealing secrets — pitching, briefing, or onboarding — a one-way NDA gives you full protection without taking on duties yourself. If both sides will exchange sensitive material, a mutual NDA is fairer, faster to agree, and avoids the awkwardness of asking the other party to sign up to obligations you are unwilling to accept. A common practical tip: if you propose a one-way NDA and the other side will also be sharing information, expect them to ask for a mutual one — and that is usually reasonable. Choosing the wrong type rarely makes the NDA invalid, but it does create friction and can leave one party unnecessarily exposed or unnecessarily restricted.

What every NDA should include

Whether one-way or mutual, a usable NDA needs the same core clauses. The single most important is the definition of confidential information — too narrow and real secrets fall outside it; too broad and it becomes unenforceable and off-putting to sign. The essential clauses are:

A short, clear NDA covering these points is far more useful than a long one full of boilerplate that no one reads.

What is excluded from confidentiality

Recipients will, quite reasonably, insist on standard carve-outs, and a fair NDA includes them. Information is usually not treated as confidential if it: is already in the public domain (or becomes public without the recipient’s fault); was already lawfully known to the recipient before disclosure; is independently developed by the recipient without using the confidential information; or is lawfully received from a third party who was free to disclose it. There is also always an exception for disclosures required by law, a court or a regulator. These exclusions do not weaken a well-drafted NDA — they make it realistic and enforceable, because a court will not uphold a confidentiality obligation over information that is genuinely public or independently known.

How long should an NDA last?

There are two time periods to think about: how long the NDA is “open” for new disclosures, and how long the duty of confidentiality survives. For most commercial situations a confidentiality obligation of three to five years after the end of the relationship is reasonable. Genuine trade secrets — a secret formula, source code, or a customer database — may justify a longer or even indefinite obligation, because their value depends entirely on staying secret. Overly long blanket terms (for example, “perpetual” confidentiality over all information) can be unattractive to sign and harder to enforce, so the sensible approach is to match the duration to the real shelf-life of the information. Set the period deliberately rather than accepting whatever the template happens to say.

Do NDAs actually work?

Yes — but their value is as much in deterrence and clarity as in litigation. A signed NDA makes the confidentiality obligation explicit, so the other side knows the rules and a breach is a clear breach of contract. If information is misused, the remedies available include an injunction to stop further disclosure (often the most valuable remedy, because the harm from a leak is hard to undo), damages for losses caused, and in some cases an account of profits the wrongdoer made. The honest limitation is that an NDA cannot un-share a secret once it is out, and proving the source and the loss can be difficult. That is why NDAs work best alongside good practice: only share what you need to, mark confidential material clearly, and keep a record of what was disclosed and when.

NDAs with employees — and the important 2025 change

NDAs and confidentiality clauses are common in employment contracts and settlement agreements, and they remain lawful for protecting genuine business secrets. But the law has tightened significantly. Under the Employment Rights Act 2025, an NDA or confidentiality clause is void to the extent it tries to prevent a worker speaking out about harassment or discrimination (of the kinds covered by the Equality Act 2010), or about how their employer responded to it. Detailed regulations — including narrow “excepted agreements” that a worker may still request — are being consulted on, with the framework expected to take full effect by 2027. Separately, and for many years, an NDA has never been able to stop someone making a protected disclosure (whistleblowing), reporting a crime to the police, or co-operating with a regulator. The practical message for employers is clear: confidentiality clauses are fine for protecting commercial secrets, but they cannot be used to silence complaints of harassment or discrimination, and any clause that tries to is unenforceable. Getting this wrong now carries real legal and reputational risk.

NDA vs other ways to protect information

An NDA is one tool, and it works best as part of a wider approach. It is easy to confuse it with related protections, but they do different jobs. A confidentiality (NDA) clause stops people misusing information you share. An intellectual property assignment transfers ownership of created work to you — essential when a freelancer makes something, because an NDA alone does not give you ownership (see our copyright guide). A non-compete or restrictive covenant limits what someone can do after they leave, which is a separate and more heavily scrutinised tool. And a registered trade mark or patent protects brands and inventions through registration rather than secrecy. The strongest position usually combines several: an NDA to control disclosure, an IP assignment to own what is created, and registered rights where they apply. Relying on an NDA alone to do all of this is a common and costly gap.

How to use an NDA well

Signing an NDA is only the start; using it properly is what protects you. A practical routine looks like this:

• Sign before you share. Get the NDA in place before any confidential information changes hands, not after.
• Pick the right type. One-way if only you disclose; mutual if both sides do.
• Mark confidential material. Label documents clearly so there is no argument later about what was covered.
• Share only what is needed. Limit disclosure to the people and information genuinely required for the purpose.
• Keep a record. Note what was disclosed, to whom and when — vital evidence if there is ever a breach.
• Handle the end of the relationship. Request return or destruction of your information when the deal finishes.
• Review before signing others. Read NDAs you are asked to sign; check the definition, purpose, duration and any unusual obligations.

None of this is complicated, but skipping it is how businesses end up with an NDA that looks reassuring on paper yet protects very little in practice.

NDAs in common business situations

Different situations call for different emphasis. When pitching to investors, expect that many will decline to sign at an early stage; share enough to interest them without revealing your crown jewels, and use a one-way NDA once talks become serious. With freelancers and agencies, pair a one-way NDA with an IP assignment so you both protect and own the work. In M&A and joint ventures, a mutual NDA is standard before any due diligence begins. With employees, build confidentiality into the contract, but keep it firmly on the side of protecting trade secrets rather than restricting lawful complaints. Matching the NDA to the scenario — rather than reusing one generic template for everything — is what makes it effective.

Common NDA mistakes to avoid

• A vague definition of confidential information. Too narrow leaves gaps; too broad is unenforceable.
• Using a one-way NDA when both sides share. Expect pushback and an unfair imbalance.
• No permitted-purpose limit. Without it, the recipient can use your information for anything.
• Forgetting return or destruction. Leaves copies of your information in the other party’s hands indefinitely.
• Unrealistic duration. Perpetual confidentiality over everything is off-putting and hard to enforce.
• Trying to silence misconduct. Clauses that suppress harassment or discrimination complaints are now void.

Worked examples

One-way: a founder wants to pitch a new fintech product to an investor, sharing financial projections and the product roadmap. The investor is not sharing anything confidential in return. A one-way NDA is correct: the founder discloses, the investor is bound to keep it secret and use it only to evaluate the investment.

Mutual: two software companies are exploring a partnership and each will reveal customer data, pricing and technical architecture to assess the fit. Because both are disclosing, a mutual NDA is correct: each protects the other’s information, the obligations are even, and the agreement is quick to sign because neither is asking for more than it gives.

London businesses: a quick note

NDAs work the same across the UK, so there is no London-specific version — but the sheer density of deals, partnerships, agencies and hiring in London means businesses there sign more of them, more quickly, and often without proper review. The risk is using a generic template that does not match the situation (one-way where it should be mutual, or a definition that misses your real secrets), or a clause that strays into the now-unlawful territory of silencing complaints. A short, well-drafted NDA tailored to the deal is a small cost that prevents expensive disputes later.

Can you write your own NDA — and when might you not need one?

You can use a template NDA, and for low-stakes, routine situations a good template is often enough. The risks come from using a template blindly: the definition of confidential information may not fit your actual secrets, the duration may be wrong, it may be one-way where it should be mutual, or it may contain a confidentiality clause that now falls foul of the 2025 rules on harassment and whistleblowing. The higher the value of the information — investor data, a key partnership, trade secrets, M&A — the more a short professional review pays for itself, because the cost of a flawed NDA only shows up when something goes wrong and it is too late to fix.

It is also worth knowing when an NDA is not the answer. Information that is already public cannot be protected by one. Some investors and large counterparties simply will not sign at an early stage, so you may need to share selectively instead. And an NDA does not give you ownership of created work — for that you need an IP assignment. Used in the right situations, and skipped where it adds nothing, an NDA is a cheap and powerful tool; used reflexively, it can create a false sense of security.

What we see in practice

Clients ask one-way or mutual, but the more important question is what an NDA cannot do. No NDA can lawfully stop someone making a protected disclosure: under the Public Interest Disclosure Act 1998, which built whistleblowing protection into the Employment Rights Act 1996, a confidentiality clause is void to the extent it tries to prevent a worker blowing the whistle. Recent reform has widened this for disclosures about harassment and discrimination, so an over-broad NDA is not only unenforceable in part — it can signal bad faith.

On the one-way versus mutual choice, the practical test is who is actually disclosing. If only one side shares confidential information — a founder pitching an investor, say — a one-way NDA is cleaner and quicker to agree; if both sides will exchange sensitive material, a mutual NDA removes the awkward imbalance and usually gets signed faster because neither party feels exposed. The disputes we see are rarely about which type was used; they are about a vague definition of confidential information and a missing or unrealistic duration.

How Hayhills can help

Drafting and reviewing NDAs is a commercial matter, not a reserved legal activity, so Hayhills can help you directly: choosing the right structure (one-way or mutual), defining your confidential information properly, setting a sensible duration, and making sure your confidentiality and settlement clauses comply with the 2025 rules on harassment and whistleblowing. We can prepare a reusable NDA template for your business and review the ones you are asked to sign. Where a breach needs to be enforced through the courts, we work alongside and introduce a regulated litigator. Explore our commercial and IP service or speak to Hayhills today.

This article is for general information only and does not constitute legal or accountancy advice. Hayhills Limited, trading as Hayhills Legal Advisory, provides non-reserved legal advisory services. Always check current requirements at GOV.UK.

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