Drafting an Australian mutual non-disclosure agreement
An NDA is often the first written agreement between parties. A well-drafted NDA balances protection of confidential information against commercial workability, and interacts with the general law on equitable confidence.
This is an 8-step workflow for drafting a mutual non-disclosure agreement under Australian law suitable for commercial negotiations, due diligence, and technology discussions.
Before you start
- The purpose of the disclosure is clear
- The parties to the agreement are confirmed
- The nature of the confidential information is identified
- Client risk appetite for unusual clauses is understood
The workflow
Identify parties and the Purpose
Identify the contracting entities, their ACN/ABN, and clearly define the Purpose for which confidential information will be shared (e.g. evaluating a potential acquisition).
Define Confidential Information
Define Confidential Information broadly but include carve-outs for information that is public, independently developed, or received from a third party without restriction.
Set permitted use and disclosure
Limit use to the Purpose. Permit disclosure to Representatives on a need-to-know basis and require the receiving party to ensure those Representatives comply.
Address required disclosures
Address compelled disclosures under law or regulatory process, including notification obligations and cooperation to seek a protective order where lawful.
Term, return and survival
Set the duration of the NDA (typically 2-5 years) and the survival of obligations after termination. Include return or destruction obligations with an exception for legal hold records.
Remedies and injunctive relief
Acknowledge that damages may be inadequate and confirm entitlement to seek injunctive relief. Avoid capping liability for confidentiality breach unless the client instructs.
Privacy and IP considerations
Address the Privacy Act 1988 (Cth) if personal information will be shared, including any APP obligations. Confirm no IP is assigned and clarify feedback and derivatives.
Governing law and execution
Select the governing law and jurisdiction (usually the state where the client is based). Prepare execution blocks for s 127 Corporations Act 2001 (Cth) compliance.
What you will have at the end
An executed mutual NDA that protects both parties' confidential information, balances commercial workability, and interacts correctly with Australian privacy and corporations law.
Common issues
- Definition of Confidential Information too narrow or too broad
- Missing required-disclosure carve-outs that expose the receiving party to breach
- No carve-out for residuals in knowledge-based industries
- Blanket injunctive relief clauses without acknowledging damages may be inadequate
- Execution blocks that do not comply with s 127 for companies
Run this workflow on a real matter
Quillio drafts the NDA from your matter intake, flags unusual clauses, and compares it against market-standard AU precedent. See /practice-areas/commercial-lawyers or start a free trial.
This workflow is a general guide. Adapt each NDA for the transaction, regulatory context, and client risk appetite.
Try this workflow with Quillio.
Quillio can run this workflow on a real matter, with citations to current AU authority on every step. The free trial requires no credit card.
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