Non-disclosure agreements under Swedish law

What is a non-disclosure agreement?

A non-disclosure agreement, commonly called an NDA or confidentiality agreement, protects information that one or more parties need to share.

The agreement identifies the confidential information, the purpose for which it is disclosed, and the ways in which the recipient may use it. It may also regulate who may access the information and what happens to documents and materials when the relationship ends.

Confidential information may include:

• business plans and financial information
• prices and commercial calculations
• customer and supplier information
• technical solutions and source code
• product concepts and development plans
• working methods and know-how
• information concerning investments or business transfers.

When should an NDA be used?

The agreement should generally be signed before confidential information is disclosed. It may be used during preliminary discussions or alongside a broader commercial agreement.

NDAs are commonly used in connection with:

• negotiations with investors or potential buyers
• collaborations between businesses
• consulting engagements
• product and software development
• due diligence and business transfers
• negotiations with suppliers and commercial partners
• access to particularly sensitive information during employment.

An NDA may be unilateral or mutual. A unilateral agreement is appropriate when only one party discloses confidential information. A mutual NDA is generally used when both parties disclose information requiring protection.

What should an NDA contain?

The terms should reflect the information being disclosed and the recipient’s reason for receiving it.

The agreement should generally address:

• the parties covered by the agreement
• the definition of confidential information
• the permitted purpose and use of the information
• the people and professional advisers who may receive it
• security and storage requirements
• exclusions for public or previously known information
• the return or destruction of documents and data
• the duration of the confidentiality obligations
• governing law and dispute resolution
• the consequences of a breach.

A definition that is excessively broad or unclear may create uncertainty. The protected information, permitted use, and relevant exclusions should therefore be described as precisely as the circumstances allow.

NDAs and trade secrets

Swedish legislation protects certain confidential business and operational information as trade secrets. The information must satisfy specific requirements, including that it is not generally known or readily accessible and that reasonable steps have been taken to keep it secret.

An NDA may form part of those protective measures. It may also create contractual obligations covering information that does not meet the statutory definition of a trade secret.

The agreement should allow disclosures required by law, a court, or a competent authority. It should not be used to conceal criminal conduct or other serious wrongdoing.

If the parties share personal data, the GDPR may impose separate requirements. An NDA does not replace a data processing agreement when one party processes personal data on behalf of the other.