Non-Disclosure Agreements in Australia

An NDA is usually the first legal document a business ever signs, and often the one taken least seriously. It gets sent over as a formality before a call, skimmed for thirty seconds, and signed without much thought either way. Most of the time that is fine. Sometimes it is not, and the difference usually comes down to whether the document actually said what you needed it to say, and whether it was reasonable enough to be enforced in the first place.

This guide covers when you actually need an NDA, what a properly drafted one should include, what happens if it is breached, and what it costs to get one done properly in Australia.

What an NDA actually does

A non-disclosure agreement, also called a confidentiality agreement, is a contract that restricts one or both parties from sharing specified confidential information with anyone outside the agreement. It does not stop a deal from falling through, and it does not give you ownership over anything. It only protects information from being disclosed or used outside an agreed purpose.

What is easy to miss is that a form of protection exists even without a signed NDA. Australian law recognises an equitable duty of confidence that can arise independently of any contract, where information is specific, genuinely confidential, and shared in circumstances where a reasonable person would understand it was given in confidence. A written NDA does not replace this protection. It sits alongside it, and adds real value by letting you specify exactly what counts as confidential and how it can be used, rather than relying on a court to work that out after the fact. Getting that specificity right in writing is usually the difference between a straightforward case and a difficult one.

When you need one

NDAs get used more often than they need to, and skipped in situations where they would genuinely help. As a general guide:

You probably need one when:

You are sharing a business plan, financial information, or a product roadmap with a potential investor, partner, or acquirer before anything is signed
A contractor, agency, or supplier needs to see pricing, customer data, or internal processes to quote or scope work
You are in early talks with another business about a partnership, distribution deal, or joint venture
Someone is being given access to source code, technical specifications, or proprietary methods

You probably do not need one when:

You are having a general conversation that does not go beyond publicly available information
You are exchanging information that is not genuinely sensitive

Signing an NDA for every low-stakes conversation trains people to skim and sign without reading, which defeats the purpose. Save it for when there is something real to protect.

What a well-drafted NDA should include

A specific definition of confidential information

Avoid vague catch-all language alone. Name what you are actually protecting: financials, customer lists, technical documentation, business plans, pricing, or source code.

A clear permitted purpose

The agreement should restrict use of the information to evaluating or delivering a specific project or transaction, not just "business purposes" in general. This is what stops information shared for one reason being reused for another.

Coverage for the other side's people

The receiving party's confidentiality obligation should extend to their own employees, contractors, or advisers who see the information. This is usually done either by requiring individual undertakings from those people, or by making the receiving party responsible for their compliance.

A sensible duration

Two years is the most common default for a commercial NDA, though two to five years is fairly typical depending on the industry and how long the information stays sensitive. Confidentiality obligations can technically run indefinitely, but recipients are usually reluctant to agree to that.

Return or destruction of materials

If discussions end, whether the deal proceeds or not, the receiving party should be required to return or destroy any documents, files, or data they received, and confirm they have done so.

Carve-outs that make it enforceable

An NDA needs to allow disclosures that are already public, required by law, or necessary for legal proceedings relating to the agreement. Confidentiality obligations cannot be used to block disclosures protected under Australia's whistleblower laws, which allow certain disclosures to regulators such as ASIC or APRA.

Mutual or one-way?

This depends on which way information actually flows.

A one-way (unilateral) NDA fits situations where only one party is disclosing anything sensitive, such as a founder briefing a potential contractor or supplier. One practical point worth knowing: because the recipient in a one-way NDA is not giving anything in return, some of these are structured as a deed rather than a simple agreement, since a deed does not require the same consideration a contract does. Your lawyer will usually pick the right form for you, but it is worth knowing why a "deed" sometimes appears instead of an "agreement."

A mutual NDA fits situations where both sides are sharing something worth protecting, such as two businesses exploring a partnership, merger, or joint venture, where each side has its own confidential information on the table. Mutual NDAs also tend to be easier to negotiate, since both sides are bound by the same obligations and neither has much incentive to push hard for one-sided terms.

Are NDAs enforceable in Australia, and what happens if one is breached?

Generally, yes, provided they are reasonably drafted. Where a confidentiality clause effectively restrains someone from competing or working in a field, courts assess it the same way they assess any restraint of trade: by looking at whether it goes no further than necessary to protect a genuine business interest, considering its scope, duration, and geographic reach. The party relying on the restraint carries the burden of showing it is reasonable, and reasonableness is judged as at the date the NDA was signed, not with hindsight.

If an NDA is breached, there are several remedies available, and they are not all equally useful in practice:

Damages are available at common law, but are often a weak remedy for a confidentiality breach specifically, since the loss caused by a disclosure can be genuinely difficult to put a number on.
Injunctions, both to stop an ongoing or threatened breach and as a final order after a full hearing, are usually the more useful remedy, particularly where the concern is stopping further use or disclosure rather than compensating for what has already happened.
An account of profits is available as an alternative to damages. Rather than compensating you for your loss, it requires the other party to hand over the profit they made from misusing your information, whether or not you can show you suffered an equivalent loss. This can matter a great deal where someone has built a business or landed a deal off the back of information they were not supposed to use.

To get an urgent (interlocutory) injunction before a full trial, you generally need to show a serious question to be tried and that the balance of convenience favours granting it, weighing the harm to each side. Courts also expect parties to move quickly. Delay in seeking an injunction after discovering a breach can itself count against you.

How much does an NDA cost in Australia?

Costs vary depending on complexity, but a straightforward NDA prepared by a lawyer is typically a fixed, modest cost rather than an open-ended hourly engagement. At Plumlaw, NDAs start from $495 + GST on a fixed fee basis, so you know the cost before work begins.

A free template found online might be enough for a genuinely low-stakes exchange. Once real commercial sensitivity is involved, whether that is IP, financials, or customer data, a generic template is unlikely to capture what actually needs protecting, and the cost of getting it wrong tends to be far higher than the cost of getting it drafted properly, particularly given how much weaker damages can be as a remedy compared to getting the drafting right from the outset.

FAQ

Is an NDA legally binding in Australia?
Yes, provided it is reasonably drafted. Where it operates as a restraint on competing activity, overly broad or indefinite terms can be challenged and cut down by a court, even in high-value commercial deals.

What happens if someone breaches an NDA?
You may be able to seek an injunction to stop further use or disclosure, damages for loss caused, or an account of profits requiring the other party to hand over any profit they made from misusing the information. Damages alone are often the weakest of these options, since confidentiality losses can be hard to quantify.

Do I need a lawyer to draft an NDA, or is a template enough?
For low-stakes, generic exchanges, a template may be sufficient. Once you are sharing anything commercially sensitive, such as IP, financials, or customer data, a lawyer-drafted NDA tailored to what you are actually protecting is worth the modest cost, particularly since vague drafting can weaken your position beyond just the paperwork.

How long should an NDA last?
Two years is the most common default, with two to five years being fairly typical.

Do I need an NDA before talking to a developer or technical contractor about my idea?
Often yes, and this scenario has its own considerations around covering source code and technical architecture specifically. See our dedicated guide: Why Every Founder Needs an NDA Template Ready Before Talking to Developers.

This article is general information only and does not constitute legal advice. The law is complex and fact specific. What applies in one situation may not apply in yours. For advice specific to your circumstances, speak with a lawyer at Plumlaw at plumlaw.co/contact.

Non-Disclosure Agreements in Australia: What Founders Need to Know Before Signing