Do you need to share confidential information with your employees? Present an offer to a potential buyer? Maybe give a vendor access to sensitive data? These are all scenarios where you may wish to use a non-disclosure agreement (NDA).

Usually the presence of an NDA indicates that both parties are interested in doing business, and are therefore keen to commence the relationship. NDAs give a level of protection, but can also slow momentum. It can mean the employee’s start date is pushed back, or delays an important sale, prolonging time to revenue. With an electronic signature solution, though, it can be made easier.

But there’s a lot more to it than that. So, below, we’ve answered the frequently asked we receive around NDAs and e-signatures.

Do I need a mutual non-disclosure agreement?

Generally speaking, a NDA makes sense whenever you want to share something valuable about your business and make sure that the other party doesn’t use it without your approval, or outright steal it.

If only one party (the disclosing party) is contemplating sharing confidential information with the other (the recipient – and any third parties), the NDA is considered a one-sided agreement. You’ll need a mutual NDA if both sides intend to share confidential information.

Do NDA’s need to be physically signed?

No. Wet signatures are not mandatory. The UK observes the Electronic Communications Act 2000, which is based on a European Community framework for electronic signatures, and accepts them as a valid form of signature. This was further clarified this year when the UK Law Commission confirmed that electronic signatures can be used to sign formal legal contracts.

Will an electronic signature make an NDA legally binding?

Similar to the answer above, with the Electronic Communications Act 2000 and the eIDAS regulation in effect, electronic signatures are recognised in the UK as legally binding. The choice of which law to use for signing NDA agreements between businesses in different countries is generally left to the parties to decide.

What are the benefits of signing an NDA electronically?

With an electronic signature, parties can sign anywhere, anytime and on any device. There is no need to visit an office, for example, and the audit trail provides peace of mind. Automated follow-ups nudge things along too in case of any lag time in signing.

Electronic signature offers bank-grade security and regulatory compliance, whereas paper-based NDAs run the risk of getting lost or ending up sitting on open desks for anyone to read. DocuSign, for example, also securely protects confidential information with public key infrastructure (PKI). It uses industry-leading standards of enforceability and multiple levels of authentication.

Paper NDAs also come with added operational costs such as printing and posting, taking a bite out of the profits with each transaction.

Can I ask a prospective employee to sign an NDA?

During the hiring process, a certain amount of internal information may need to be shared for the candidate to make an informed decision before onboarding. An NDA could be appropriate here. As part of the employment contract, confidentiality clauses covering technical details and clients is also common practice.

More HR professionals are using electronic signature and digital solutions to make this stage quick and efficient. Storing the signed documents electronically is also useful should they need to be retrieved in future, rather than digging about in a filing cabinet.

Should a potential customer be asked to sign an NDA?

In some industries, it can be appropriate to have a prospective buyer sign an NDA to avoid them using information and figures to leverage a deal with a competitor.

I want to create an NDA electronically. Where do I start?

DocuSign has a template library with pre-tagged templates to choose from, allowing you to get started quickly. You can create reusable NDA templates to reduce document setup time.

If you are a G-Mail user, then DocuSign has you covered there too. As part of the partnership with Google, DocuSign for Google Docs offers a standard mutual NDA template from the legal solution experts at LegalZoom. Found within the Google Docs template gallery, common fields are automatically filled out at the time of signing to make things even easier for all parties.

If you are new to electronic signature or want to try one of DocuSign’s NDA templates, register for our free 30-day trial.