Reviewing a Non-Disclosure Agreement in the UAE: Which Clauses Actually Define the Scope of Protection?

Two parties reviewing an agreement before signing it in a business meeting
Nevada Academic Team 7 min read
Key takeaways
  • The UAE's new Civil Transactions Law makes anyone who uses or discloses, without permission, confidential information obtained in connection with negotiations or a contract liable under the general rules, but it does not say what is confidential or what it may be used for.
  • An NDA's strength lies in five clauses: a clear definition of the information, a specific permitted purpose, a list of who may see it, defined exclusions, and how it is returned or destroyed at the end.
  • Where the exchange includes personal data, the NDA alone is not enough: the Personal Data Protection Law, or the applicable free zone law, must also be checked.

This article is general legal information and is not a substitute for a licensed legal adviser reviewing the agreement and the law that governs it.

What does the new UAE law say about confidential information?

The Civil Transactions Law issued by Federal Decree-Law No. 25 of 2025 came into force on 1 June 2026, replacing the Civil Transactions Law of 1985. [1, 2] The new law contains specific provisions on pre-contractual negotiations, which is the stage at which most NDAs are signed.

Article 121 provides that negotiations must be started, conducted and ended in good faith, that negotiating does not oblige anyone to conclude a contract, and that a party who negotiates or breaks off in bad faith is liable for the actual loss the other party suffers, not for the profit it expected from the contract. [1, 2] Article 122 requires each party to tell the other about information of decisive importance to its consent, and the parties cannot agree to limit or exclude this duty. [1, 2]

Article 123 is the most relevant here: anyone who uses or discloses, without permission, confidential information obtained in connection with negotiations or a contract is liable under the general rules. [1, 2]

Why is the statutory rule not enough?

Article 123 sets out the principle of liability, but it does not answer the questions disputes usually turn on: what counts as confidential, what use is permitted, who may see it and when the obligation ends. A written agreement settles those questions.

WIPO describes an NDA as a binding contract that creates a confidential relationship, in which the recipient undertakes not to pass the information to third parties or use it for anything other than the stated purpose, and stresses that the obligation only works if the information covered is clearly identified. [3]

A team reviewing business documents at a meeting table
Agree the scope of information to be shared before negotiations start, not after.

How do you define confidential information without losing protection?

The definition is the foundation of the agreement. The usual mistakes are making it so broad that it becomes meaningless, such as “all information relating to the company”, or so narrow that it covers only “trade secrets”. WIPO suggests a definition wider than trade secrets, with examples of categories such as business plans, customer lists and formulas, combined with a way for the discloser to designate what it treats as confidential. [3]

In practice, a good definition covers three things:

  • Categories: pricing, development plans, technical data, customer data and supplier terms.
  • Form: written, electronic and oral information, and anything seen during site visits or demonstrations.
  • Identification: marking documents, or a written notice summarising oral disclosures within an agreed period. WIPO expressly recommends dealing with orally disclosed information. [3]
The clauses that set the scope
ClauseWhat it must defineCommon gap
DefinitionCategories, examples, how identifiedGeneric wording, no examples
PurposeOne named useBars disclosure but not use
RecipientsPeople and entities by roleAdvisers and affiliates omitted
ExclusionsPublic, prior, independentNo burden of proof
EndingReturn or destroy, certificateBack-ups forgotten
Each clause answers one question; leaving any of them out creates a gap that will be argued over in a dispute.

Purpose and recipients: limiting use, not just disclosure

A specific purpose

Many agreements prohibit passing information to third parties but do not restrict how the recipient uses it. In most cases the real risk is not a leaked file, but the recipient using your pricing or plans in a competing bid or its own product.

So state the purpose in one specific sentence, such as “evaluating a possible contract for the supply of an e-learning platform”, and provide that any use outside that purpose needs written consent. WIPO treats defining the authorised uses, such as evaluating a possible deal or licence, as a core element of the agreement. [3]

Who may see the information?

The recipient is rarely a single person. There are the relevant employees, affiliated companies, legal and financial advisers and sometimes funders. The agreement should set out:

  • who may receive the information, by role rather than by name, on a need-to-know basis;
  • the recipient’s duty to bind those people to confidentiality at least as strict as its own, and its liability for their breaches;
  • the rule on disclosure to anyone else, which is a prohibition unless there is written consent.

WIPO advises limiting what is shared with third parties to what is necessary and keeping a record of who holds copies of confidential documents. [3]

Exclusions, duration and ending

Exclusions and compelled disclosure

Standard exclusions include those WIPO names expressly: information that becomes public through no fault of the recipient, and information the recipient can show it developed independently. [3] Agreements usually add information the recipient already knew before disclosure or received from a third party without restriction.

More important than listing an exclusion is deciding who must prove it: put the burden of showing that an exclusion applies on the recipient. Add a compelled-disclosure clause: if a court or regulator demands the information, the recipient notifies the discloser promptly where the law allows and discloses only what is required.

Paper documents being shredded in an office
The return-or-destroy clause decides what happens to copies once the purpose ends, electronic copies included.

Duration and return or destruction

Set two separate periods: the period during which information is exchanged, and how long the confidentiality obligation survives after the exchange ends. The parties can agree that certain categories, such as technical know-how, stay protected for as long as they remain confidential.

When the purpose ends, or on the discloser’s request, the recipient returns or destroys the information and confirms this in writing, which WIPO includes in its guidance on managing confidential documents. [3] Do not forget back-ups and email: if they cannot technically be erased, agree that they remain confidential and are isolated from use.

Reviewing the NDA before signing
Parties and law
  • Parties' legal names
  • Direction of information flow
  • Governing law
  • Dispute forum
Scope
  • Categories of information
  • Oral disclosures
  • Permitted purpose
  • List of recipients
Ending and risk
  • Duration of obligation
  • Return or destruction
  • Compelled disclosure
  • Personal data
A practical pre-signing checklist; the final wording should go to your legal adviser.

When the exchange includes personal data

Customer, trainee or employee files are personal data, and an NDA does not by itself deal with the obligations that come with processing them. At federal level, the Personal Data Protection Law prohibits processing without the data subject’s consent except in specified cases, requires a processor to follow the controller’s instructions and contracts and to erase data when the period ends, and sets conditions for transferring data outside the country. [4]

The federal law does not apply to companies in free zones that have their own data protection legislation, [4] so check which law applies to each party. The practical rule: do not share real personal data at the evaluation stage if substitute data will do.

Common mistakes at signing

Even a well-drafted NDA can lose its effect through simple procedural mistakes. The most frequent are:

  • Signing after disclosure has started: if files were exchanged before signing, state that the agreement covers information disclosed from a specified earlier date.
  • The wrong party: one group company signs while another receives the information. Name the parties by their legal names and list the affiliates covered.
  • The other side’s one-way template: it protects only the discloser, yet you will be disclosing too. Establish which way information will flow before accepting any template.
  • Conflict with the main contract: if a later contract has its own confidentiality clause, or states that it supersedes all prior agreements, make clear which text governs the information exchanged before signing.
  • No governing law or forum: state both expressly, especially where one party is abroad or in a free zone.

Hypothetical example: evaluating an e-learning platform

Hypothetical example: A training centre in Dubai is evaluating an e-learning platform supplier, which needs its development plan, price list and a sample of subscriber records.

The team defined the purpose as evaluating a contract for the platform within three months, limited recipients to the supplier’s project team and its legal adviser, and required a written notice within a set number of days for anything presented orally in meetings. Instead of real subscriber records it provided a test file with substitute data, and required copies to be destroyed and a certificate provided at the end of the evaluation, with any back-ups that could not be erased remaining protected. The wording went to the legal adviser before signing.

Conclusion

The new UAE law establishes liability for using or disclosing confidential information without permission, but it is the agreement that draws the boundaries of protection. Before signing, check five clauses: definition, purpose, recipients, exclusions and ending, and treat personal data as a separate matter with its own law.

Frequently asked questions

Do I need an NDA if the law already protects confidential information?

Usually, yes. Article 123 of the Civil Transactions Law establishes liability for using or disclosing confidential information without permission, but it is the agreement that defines what is confidential, the permitted purpose, who may see it and when the obligation ends. [1, 2]

Should the NDA be mutual?

It depends on which way the information flows. If only one party is disclosing, a one-way agreement is usually enough; if both are sharing sensitive material, a mutual NDA is fairer and easier to negotiate.

Does the NDA cover what is said in meetings?

Not automatically, if the definition requires documents to be marked. WIPO recommends that the agreement provide a way to identify orally disclosed information as confidential, such as a written summary sent within an agreed period. [3]

Does an NDA transfer ownership of the information or grant a licence to use it?

It should not. The NDA sets the terms of access and use for a specific purpose; any licence or transfer of rights needs a separate contract that says so expressly.

What if the other side breaks off negotiations after seeing our information?

Negotiating does not oblige anyone to sign a contract, but the new law requires good faith in starting, conducting and ending negotiations, and makes a party who negotiates or breaks off in bad faith liable for actual loss, in addition to liability for using or disclosing confidential information. [1, 2]

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