{"id":5593,"date":"2026-06-12T07:49:19","date_gmt":"2026-06-12T05:49:19","guid":{"rendered":"https:\/\/maraz.es\/?p=5593"},"modified":"2026-06-18T15:22:35","modified_gmt":"2026-06-18T13:22:35","slug":"nda-confidentiality-agreement","status":"publish","type":"post","link":"https:\/\/maraz.es\/en\/nda-confidentiality-agreement\/","title":{"rendered":"What an NDA (Confidentiality Agreement) Is and Its role in M&A transactions"},"content":{"rendered":"

 <\/p>\n

NDA, or confidentiality agreement, is the first contract any business owner signs before disclosing or receiving sensitive information in a corporate transaction<\/strong>. If you are about to launch the sale of your company, raise a funding round, enter into a joint venture or engage a strategic advisor, that seemingly routine document is what separates a protected negotiation from an irreparable information leak.<\/p>\n

In the Spanish middle market it is one of the costliest mistakes a small or mid-sized company can make: accepting the buyer\u2019s template without reading it, or downloading a generic form off the internet, on the assumption that \u201can NDA is an NDA.\u201d It is not. A poorly drafted agreement leaves the seller without real protection precisely when it is needed most.<\/p>\n

This guide explains, with legal analysis updated to 2026, exactly what an NDA is, which clauses cannot be omitted, what types exist, what its legal validity is in Spain, and why it is the first signature in any M&A process.<\/p>\n

What is an NDA or Confidentiality Agreement<\/h2>\n

An NDA (Non-Disclosure Agreement) is a contract under which one or more parties undertake to keep secret the confidential information they receive during a negotiation or business relationship, and not to use it for purposes other than those agreed. It is legally binding and enforceable before the courts.<\/p>\n

The terms NDA<\/strong>, confidentiality agreement<\/strong>, non-disclosure agreement<\/strong> and secrecy agreement<\/strong> are fully equivalent: they all designate the same legal instrument. The only difference is one of language or style. The abbreviations \u201cConfidentiality Agreement (CA)\u201d or \u201cconfidentiality undertaking\u201d are also used.<\/p>\n

From a legal standpoint, the NDA is an atypical contract<\/strong> (contrato at\u00edpico): it has no specific regulation of its own in the Spanish Civil Code, but is grounded in the principle of freedom of contract (autonom\u00eda de la voluntad) under Article 1255 of the Civil Code<\/strong>, whereby contracting parties may establish such terms, clauses and conditions as they see fit, provided they are not contrary to law, morality or public policy (BOE: Civil Code<\/a>). Legal scholarship characterises it as a continuing-performance contract with a negative obligation: for a set term, the receiving party undertakes not to do something\u2014not to disclose, not to use beyond the agreed purpose, not to copy.<\/p>\n

It is signed by natural or legal persons and arises whenever sensitive information is to be exchanged: company sales, funding rounds, alliances, technology licensing, or the engagement of suppliers or advisors with access to internal data. It must be signed before<\/strong> any information is handed over: disclosure made prior to signature is treated as voluntary disclosure, and the recipient can rarely be pursued afterwards.<\/p>\n

NDA vs. Confidentiality Agreement vs. Confidentiality Clause: Are they the same?<\/h2>\n

It is worth distinguishing three concepts that are frequently confused:<\/p>\n

    \n
  1. NDA, confidentiality contract or confidentiality agreement. <\/strong>A standalone, self-contained document focused exclusively on protecting information. It is signed as a step preliminary to a negotiation.<\/li>\n
  2. Embedded confidentiality clause. <\/strong>A provision within a broader contract (employment, services, distribution, shareholders\u2019 agreement, LOI). It is not a separate document but a clause integrated into another principal agreement.<\/li>\n
  3. When each is appropriate. <\/strong>A standalone NDA is preferable where confidentiality is the principal object of the phase (typically in M&A, where the NDA is signed first and information is disclosed only afterwards). An embedded clause is sufficient where confidentiality is ancillary to an already-formalised contractual relationship.<\/li>\n<\/ol>\n\n\n\n\n\n\n\n
    \n

    Aspect<\/strong><\/p>\n<\/td>\n

    		Standalone NDA<\/strong><\/td>\nEmbedded confidentiality clause<\/strong><\/td>\n<\/tr>\n<\/thead>\n
    When to use<\/strong><\/td>\nBefore starting a negotiation or exchange of information (M&A, investment, due diligence)<\/td>\n\n

    Where a principal contract already exists (employment, services, distribution) and confidentiality is ancillary<\/p>\n<\/td>\n<\/tr>\n

    \n

    Scope<\/strong><\/p>\n<\/td>\n

    		Broad and detailed: definition of information, exclusions, terms, return of materials, consequences<\/td>\nLimited to what the framework contract allows; usually shorter<\/td>\n<\/tr>\n
    Risks<\/strong><\/td>\nIf missing or signed too late, the information disclosed is left unprotected<\/td>\n\n

    Risk of being diluted or of not surviving termination of the principal contract unless survival is expressly agreed<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    Types of NDA and when to use each<\/h2>\n

    Unilateral NDA (one-way)<\/h3>\n

    Only one party discloses confidential information and the other undertakes to protect it. This is the standard format in a classic sale process: the seller provides information and the buyer (or private equity fund) receives it and undertakes not to use it. It is also typical when engaging a supplier or consultant who accesses internal information without contributing any of their own.<\/p>\n

    Bilateral or Mutual NDA<\/h3>\n

    Both parties exchange confidential information and assume reciprocal obligations. This is the appropriate format where two companies are exploring a merger of equals, a joint venture or a strategic alliance, and both \u201clift the hood\u201d to show each other their numbers and processes. A common error is signing a unilateral NDA when, in fact, both parties exchange information: the result is that only one of them is protected.<\/p>\n

    Multilateral NDA<\/h3>\n

    Three or more parties are involved and at least one shares information the others must protect. It replaces multiple bilateral agreements with a single contract, and is common in research consortia, club deals or projects involving several investors. Its complexity increases because access levels must be defined among all participants.<\/p>\n

    Enhanced NDA with non-solicitation and non-use clauses<\/h3>\n

    In serious transactions, the NDA is usually reinforced with two additional clauses:<\/p>\n