Confidentiality Agreement and NDA Lawyers Adelaide: What They Protect and How They Are Enforced
Confidentiality agreements and NDAs in South Australia
A confidentiality agreement is often the first document signed in a deal, and the one least often read. It sets what the other side may do with what it learns, and what can be done if it misuses the information. Talon Legal drafts and reviews confidentiality agreements and NDAs for Adelaide businesses, and acts when confidential information is misused. Book a same-day free 30-minute consultation or call (08) 7094 2021.
Confidentiality agreement key facts
| Issue | Position in South Australia |
|---|---|
| What it does | Binds a recipient to keep information confidential and to use it only for an agreed purpose. |
| One-way or mutual | One-way where only one party discloses; mutual where both do. |
| Without a contract | Equity protects information identified with specificity, confidential in nature, received in confidence and misused without consent (Optus Networks v Telstra at [39]). |
| Contract and equity | An exhaustive contractual definition of confidential information did not indicate an intention to exclude equitable obligations (Optus at [29]). |
| Choice of remedy | Parties can agree that a party alleging misuse may elect between contract damages and an account of profits (Optus at [37]). |
| Personal information | An entity covered by the Privacy Act must take reasonable steps to protect personal information it holds (APP 11.1). |
| Restraints in NDAs | Non-solicitation and non-compete terms can be restraints of trade; most cases turn on reasonableness (Peters (WA) v Petersville at [14]). |
| Signing unread | A person who signs a document known to contain contractual terms is generally bound by it, read or not (Toll v Alphapharm at [57]). |
| Time limit | Six years after the cause of action accrued, for a claim on a simple contract (Limitation of Actions Act 1936 (SA) section 35). |
| First step | Same-day free 30-minute consultation. Call (08) 7094 2021. |
Need a confidentiality agreement lawyer in Adelaide?
Our confidentiality agreement lawyers in Adelaide act for businesses that need to share information before a deal is done, and for recipients asked to sign another party’s NDA. A confidentiality agreement, also called a non-disclosure agreement or NDA, defines what is confidential and what the recipient may do with it. Equity protects confidential information even without a contract, and the Privacy Act 1988 (Cth) adds obligations where personal information is shared. This page states the law current to 6 November 2026.
This guide is part of our professional services practice. Related guides cover consulting agreements, service agreements and terms of business and data protection and privacy.
Authors sharing a manuscript, and photographers working on unreleased products, can also see our guides to book and e-book publishing agreements and photography terms and conditions.
Confidential information put into AI tools, or seen by security testers, raises its own questions. See our guides to AI contracts and data licensing and penetration testing agreements.
Free Consultation. Send us the NDA before you sign it, or call as soon as you suspect a breach. Book a same-day free 30-minute consultation or call (08) 7094 2021.
On this page
- When does a business need a confidentiality agreement?
- Should it be one-way or mutual?
- What should the agreement define?
- What does equity protect without a contract?
- What about personal information?
- Can an NDA stop someone competing or poaching?
- Who owns documents shared under an NDA?
- What should a business do if information is misused?
- How similar matters tend to play out
- How we act on confidentiality agreements
- Case law
- Frequently asked questions
When does a business need a confidentiality agreement?
Before it shares anything it would not want a competitor to have. The usual occasions are these.
- Pitching a product or idea to an investor or manufacturer.
- Due diligence on the sale or purchase of a business, when the seller opens its books and customer records.
- Engaging contractors or consultants who will see systems, pricing or plans.
- Exploring a joint venture, where both sides disclose.
- Tenders and proposals that require a business to explain its methods.
Sign first, then disclose. Information handed over before an agreement may still be protected in equity, but the business then has to prove each element of a breach of confidence (Optus Networks v Telstra at [39]). A confidentiality agreement lawyer will define confidential information to include material disclosed before signing, because the first meeting often comes before the paperwork.
Form is rarely the issue. An NDA signed electronically or agreed by email is not invalid because the transaction took place wholly or partly by electronic communications (Electronic Communications Act 2000 (SA) section 7(1)). A transaction includes a contract or agreement (section 5). A short letter agreement can suit a single meeting. Due diligence and long negotiations need a full agreement.
Should it be one-way or mutual?
One-way where only one party discloses, mutual where both do. A one-way agreement binds the recipient only and is usual where a business shows its information to a buyer or investor. A mutual agreement binds each party as a recipient and suits joint ventures and negotiations where both sides open their books.
Mutual is not automatically fairer. If one side will disclose far more than the other, the exceptions and permissions may suit the wrong party. A party that signs a mutual agreement takes on the recipient’s obligations for everything it is shown. It is generally bound by them whether or not it read them (Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 at [57]). A recipient asked to sign a one-way agreement should check that it does not catch information the recipient already holds or develops independently.
What should the agreement define?
Each of these needs its own clause.
Confidential information
The definition should identify what is protected: financial information, customer and supplier details, pricing, plans, methods and know-how, in any form and however disclosed, including what the recipient observes on a site visit. It can also cover notes the recipient prepares from the information, and the fact that the parties are talking at all. Specificity matters in equity too, because the first element of a breach of confidence is information identified with specificity (Optus at [39]).
Permitted purpose and disclosures
The recipient may use the information only for the stated purpose, such as evaluating a proposed transaction and, if it proceeds, performing it. The agreement should allow disclosure to employees and professional advisers who need to know for that purpose. It should require the recipient to tell them the information is confidential, and make the recipient liable for their breaches. For sensitive deals, the discloser can require each of them to sign an undertaking directly.
Exclusions
Standard exclusions cover information that is or becomes public other than through a breach, information the recipient already knew without restriction, information received lawfully from a third party, and information developed independently. Disclosure required by law or a court order is usually allowed if the recipient gives notice where it can and helps limit the disclosure. The recipient should have to prove an exclusion with documents. A careful agreement also says that a confidential detail does not lose protection merely because a general version of it is public.
Return, destruction and duration
On request, or when the purpose ends, the recipient should return or destroy the information, including copies and derived notes, and certify that it has done so. The obligations can run for a fixed term or indefinitely. Trade secrets and customer data often justify an open-ended obligation; information about a short-lived opportunity may not.
No licence and no obligation to proceed
Disclosure should not transfer ownership or grant any licence of intellectual property, and the recipient should not be able to register rights in the information. Signing should not oblige either party to disclose anything or to proceed with the deal. A disclaimer of any warranty as to accuracy is common, leaving warranties to the final contract.
Remedies
The agreement should record the parties’ acknowledgement that damages may be an inadequate remedy and that the discloser may seek an injunction. It can preserve equitable rights expressly and give the discloser an election between damages for breach of contract and an account of profits (Optus at [37]). An indemnity for loss caused by a breach, including breaches by the recipient’s advisers, strengthens the position.
What does equity protect without a contract?
Information with the quality of confidence that was received in confidence. In Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21, the Full Court set out four elements of a breach of confidence in equity:
- the information is identified with specificity;
- it has the necessary quality of confidence;
- it was received in circumstances importing an obligation of confidence; and
- there is actual or threatened misuse of it without consent ([39]).
The contract and equity work together. The parties’ agreement in that case defined “Confidential Information” exhaustively. The Full Court held that the exhaustive definition did not indicate an intention to exclude equitable obligations, because the parties had codified what was confidential for the purposes of the contract ([29]). The agreement also preserved equitable rights, and the Court saw no reason why parties cannot agree that a party alleging misuse may elect between contract damages and an account of profits ([37]). Optus had judgment on its claim in equity.
A narrow definition will not necessarily strip away equity’s protection. Equity still requires proof of each element, so the contract is usually the simpler claim to run.
What about personal information?
Where the information includes personal information, such as a customer list or staff records, privacy law sits beside the agreement. An entity covered by the Privacy Act must take steps reasonable in the circumstances to protect personal information it holds from misuse, interference and loss, and from unauthorised access, modification or disclosure (APP 11.1). Those steps include technical and organisational measures (APP 11.3). An NDA with security, access and destruction terms is one organisational measure a business can point to when customer records are shared in due diligence.
Coverage turns partly on the small business operator test in section 6D. A small business is one with annual turnover of $3,000,000 or less for the previous financial year (section 6D(1)). A small business operator carries on one or more small businesses and no business that is not a small business (section 6D(3)). Some entities are not small business operators whatever their turnover. They include one that provides a health service and holds health information other than in an employee record, and one that discloses personal information for a benefit, service or advantage (section 6D(4)(b) and (c)). A contracted service provider for a Commonwealth contract is another (section 6D(4)(e)).
Overseas recipients raise a further rule. Before disclosing personal information to an overseas recipient, a covered entity must take such steps as are reasonable in the circumstances so that the recipient does not breach the APPs, other than APP 1 (APP 8.1). Where the APPs do not apply to the recipient, an act of the recipient that would breach them is taken to be the entity’s own act and breach (section 16C).
Can an NDA stop someone competing or poaching?
Only if the clause survives the restraint of trade doctrine. NDAs often include a promise not to solicit the discloser’s staff or customers, and sometimes a promise not to compete. Whether a clause is a restraint is answered by its practical working rather than merely its legal form (Peters (WA) Ltd v Petersville Ltd [2001] HCA 45 at [14]). Placing it inside a confidentiality agreement does not take it outside the doctrine.
The joint judgment in Peters observed that most reported decisions turn on the reasonableness of the restraint, particularly in relation to the legitimate interests of the parties ([14]). As Callinan J described the presumption, restraints of trade are contrary to private and public interests and unenforceable unless the person who benefits demonstrates otherwise ([51]).
In practice, tie any non-solicitation clause to the interest the disclosure creates, such as the staff and customers the recipient learns about through it. A blanket non-compete in an NDA signed for a first meeting is hard to justify.
Who owns documents shared under an NDA?
Sharing a document does not change who owns the copyright in it. Subject to exceptions such as work made by employees, the author of a literary work owns the copyright (Copyright Act 1968 (Cth) sections 35(2) and 35(6)). An assignment has no effect unless it is in writing signed by or on behalf of the assignor (section 196(3)).
Copyright gives the owner exclusive rights, including to reproduce, publish, communicate to the public and adapt the work (section 31(1)(a)), and doing those things without the owner’s licence infringes (section 36(1)). A recipient that copies a shared business plan beyond what the NDA allows may face a copyright claim as well as a contract claim. The owner’s relief includes an injunction and either damages or an account of profits (section 115(2)).
What should a business do if information is misused?
Act quickly, and keep the evidence. A practical sequence:
- Preserve the evidence: emails, access logs, documents and a timeline of what was disclosed and to whom.
- Read the agreement’s definition, purpose, exclusions and remedies clauses against what happened.
- Write to the recipient identifying the information and the misuse, and seek undertakings to stop using it and to return or destroy it.
- If the harm is continuing or about to happen, seek an urgent injunction. The equitable claim covers threatened misuse as well as actual misuse (Optus at [39]).
- Consider the money claim: damages for breach of contract or, where the agreement provides for it, an election to take an account of profits instead (Optus at [37]).
Personal information adds a deadline. If the misused information includes personal information held by an entity covered by the Privacy Act, the entity may need to assess whether there has been an eligible data breach. That is unauthorised access or disclosure that a reasonable person would conclude would be likely to result in serious harm to any affected individual (section 26WE(2)). Where there are reasonable grounds to suspect one, the entity must carry out a reasonable and expeditious assessment. It must take all reasonable steps to complete it within 30 days after becoming aware (section 26WH). If it has reasonable grounds to believe there has been one, it must give the Commissioner a statement as soon as practicable (section 26WK). It must then notify affected individuals, or in some cases publish, as soon as practicable (section 26WL).
A claim for breach of a confidentiality agreement made as a simple contract must be commenced within six years after the cause of action accrued (Limitation of Actions Act 1936 (SA) section 35). The practical deadline is much shorter, because an injunction does little once the information has spread.
How similar matters tend to play out
Three illustrations of how the law on this page combines on ordinary facts. They are not predictions, and a real outcome depends on the documents and evidence.
Lower range. A founder sends a manufacturer the full specification for a new product and signs a one-way NDA a week later. If the specification was identified with specificity and imparted in confidence, equity can protect it even before the agreement (Optus at [39]). The NDA should also define confidential information to include material disclosed before signing.
Middle range. A buyer doing due diligence on an Adelaide accounting practice receives the client list under a one-way NDA, then withdraws and writes to the clients offering its own services. That use is outside the permitted purpose, and a reasonable non-solicitation clause would add a second claim (Peters at [14]). If the practice is covered by the Privacy Act, it should also consider APP 11 and whether the data breach scheme applies (sections 26WE and 26WH).
Upper range. Two businesses end a joint venture, and one keeps using the other’s pricing model and technical reports to win work. The mutual NDA’s exhaustive definition does not, by itself, remove equitable obligations (Optus at [29]). Copying the reports without a licence infringes copyright (section 36(1)). If the NDA provides for it, the injured party can elect an account of profits instead of damages ([37]).
How we act on confidentiality agreements
We act for disclosing businesses and for recipients. For a discloser, the aim is a definition that catches what matters and remedies that work. For a recipient, it is an agreement it can actually comply with, without a hidden restraint.
| Stage | What happens | What we do |
|---|---|---|
| Before disclosure | A business plans to share information. | Advise whether an NDA is needed and whether it should be one-way or mutual. |
| Drafting or review | The NDA is prepared, or the other side's form arrives. | Draft or mark up the definition, purpose, exclusions, term and remedies. |
| Negotiation | The parties settle the terms. | Push back on one-sided exclusions and unreasonable restraints. |
| Suspected misuse | Information appears where it should not. | Preserve the evidence and send a letter of demand seeking undertakings. |
| Enforcement | Undertakings are refused or the harm continues. | Seek an injunction and pursue damages or an account of profits. |
We cannot promise an outcome, and no lawyer can. We can make sure the agreement protects what is actually being disclosed.
Every hour matters. Book a same-day free 30-minute consultation or call (08) 7094 2021.
Confidentiality case law
None of the decisions below concerned a stand-alone NDA, though Optus decided how the confidentiality terms of a commercial agreement sit with equity.
| Case | Court | Principle | Pinpoint |
|---|---|---|---|
| Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21 | Full Federal Court | Elements of breach of confidence; an exhaustive definition did not exclude equity; agreed election of remedies | [29], [37], [39] |
| Peters (WA) Ltd v Petersville Ltd [2001] HCA 45 | High Court | Restraints: practical working and reasonableness; the presumption as Callinan J described it | [14], [51] |
| Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 | High Court | A signed contract binds whether or not it was read | [57] |
Case notes
Optus Networks Pty Ltd v Telstra Corporation Ltd [2010] FCAFC 21
The Full Court held that the exhaustive definition of “Confidential Information” in the parties’ access agreement did not indicate an intention to exclude equitable obligations of confidence ([29]). The parties had codified what was confidential for the purposes of the contract. The Court saw no reason why parties cannot agree an election between contract damages and an account of profits ([37]). It also set out the four elements of breach of confidence in equity ([39]). Optus had judgment on its claim in equity (orders).
Peters (WA) Ltd v Petersville Ltd [2001] HCA 45
The joint judgment observed that most restraint of trade decisions turn on reasonableness, particularly in relation to the parties’ legitimate interests ([14]). Threshold questions may come first. They include whether there is a restraint at all, answered by its practical working rather than merely its legal form, and whether it is in respect of trade, which is not read narrowly ([14]). Callinan J described the presumption that restraints are contrary to private and public interests and unenforceable unless the person who benefits demonstrates otherwise ([51]).
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52
The joint reasons stated a general rule for a person who signs a document known to contain contractual terms and to affect legal relations. That person is bound by those terms, and it is immaterial that they have not read it ([57]). The rule applies where there is no vitiating element and no claim for equitable or statutory relief.
Frequently asked questions
What is a confidentiality agreement or NDA?
A contract under which a party receiving information agrees to keep it confidential and use it only for an agreed purpose. Confidentiality agreement and non-disclosure agreement (NDA) are two names for the same thing.
When should an NDA be signed?
Before any confidential information is disclosed. Information disclosed earlier may still be protected in equity if the elements of a breach of confidence are made out (Optus Networks v Telstra at [39]), but that is harder to prove.
Is confidential information protected without an NDA?
It can be. Equity protects information identified with specificity, with the necessary quality of confidence, received in circumstances importing an obligation of confidence, against actual or threatened misuse without consent (Optus at [39]).
Should an NDA be one-way or mutual?
One-way if only one party is disclosing, mutual if both are. A mutual form binds each party as a recipient, so it should fit what each side will actually disclose.
How long should confidentiality obligations last?
As long as the information stays valuable. Trade secrets and customer data often justify an open-ended obligation, while information about a short-lived opportunity may need only a fixed term.
Can an NDA include a non-solicitation or non-compete clause?
Yes, but the clause can be a restraint of trade, judged by its practical working (Peters (WA) v Petersville at [14]). As Callinan J described the presumption, restraints are unenforceable unless the person who benefits demonstrates otherwise ([51]).
Is an NDA signed electronically binding?
It can be. A transaction, which includes a contract, is not invalid because it took place wholly or partly by electronic communications (Electronic Communications Act 2000 (SA) sections 5 and 7(1)).
Is an NDA binding if the signer did not read it?
Generally, yes. A person who signs a document known to contain contractual terms is bound by them whether or not they read it (Toll v Alphapharm at [57]). The exceptions involve a vitiating element or a claim for equitable or statutory relief.
What happens if someone breaches an NDA?
The discloser can seek an injunction and claim damages, or an account of profits where the agreement allows that election (Optus at [37]). A claim on a simple contract must be commenced within six years after the cause of action accrued (Limitation of Actions Act 1936 (SA) section 35).
Do I need a confidentiality agreement lawyer?
For a sale, due diligence, a joint venture or any disclosure of real value, yes. A confidentiality agreement lawyer can fit the definitions and exclusions to the deal and make the remedies usable if something goes wrong. A free 30-minute consultation will tell you where you stand.