Using ChatGPT to draft your non-disclosure agreement (NDA) might feel like a quick win, especially when you’re short on time or facing a tight budget.
Perhaps you're preparing to share sensitive data with a prospective partner, or a tech start-up has asked to explore your proprietary process before a pitch. In moments like these, turning to AI for a first draft may seem like an efficient shortcut. However, when it comes to protecting confidential information, such as trade secrets, financial data, or personal details, governed by the UK GDPR, the stakes are high. A poorly drafted NDA could expose your business to risk, create confusion or even be unenforceable in law.
Our commercial law solicitors work with businesses every day to ensure their NDAs are not only fit for purpose but also commercially watertight. Whether you’re dealing with a one-off freelancer or preparing for investment talks, we can guide you through what to include, how to structure it, and what pitfalls to avoid.
Contents:
Why are NDAs critical legal documents?
NDAs are agreements which are crucial for businesses seeking to safeguard their confidential information, including sensitive information, know-how, proprietary information, trade secrets and data.
NDAs establish clear parameters for the use of that information and provide legal remedies if it is misused.
They should be used in a number of contexts, including when sharing information with potential business partners or new freelancers.
How could ChatGPT help you with an NDA?
ChatGPT can be used to:
- Understand the background and issues surrounding the protection of your confidential information.
- Generate scenarios about how NDAs can safeguard your business.
- Research what an NDA looks like and what types of clauses it should include.
- Formulate ideas and questions to ask your lawyer when discussing an NDA.
What are the risks of using ChatGPT for legal contracts?
Whilst ChatGPT can help formulate ideas for your NDA, using AI to draft an NDA comes with some risks. It may miss nuances in relation to drafting an NDA, including:
- What is classified as confidential information?
- Should data protection clauses be included because the parties will share personal data caught by the UK GDPR?
- Should the NDA include clauses to allocate risk, such as an indemnity clause (a type of clause that is frequently challenged in negotiations)?
In addition, using ChatGPT to draft an NDA can introduce other risks, for example:
- The NDA could be unenforceable if challenged by the other party.
- ChatGPT output may be misleading, inaccurate, or outdated and may not reflect the latest legal developments, including the lessons learned from case law.
- A ChatGPT NDA may not adequately address your concerns or comply with applicable laws (e.g. it may not be UK GDPR compliant if data processing provisions are required but ChatGPT misses that requirement).
- A ChatGPT NDA may not adequately address your concerns or comply with applicable laws. For example, it may fail to include essential data protection clauses required under UK GDPR if personal data is being shared. The Information Commissioner’s Office provides clear guidance on data security requirements under the UK GDPR, which should inform how these clauses are drafted.
- The resulting output could be unclear, thereby creating misunderstandings between parties and leading to disputes.
- Use of ChatGPT could lead to you disclosing highly sensitive or confidential information, which it might misuse!
How can a solicitor help you with your NDA?
Our Commercial solicitors help to provide tailored NDA advice on:
- Which format of NDA is appropriate, for example whether it should be one-sided or mutual.
- Defining 'confidential information' to avoid ambiguity and disputes.
- Drafting data protection provisions in relation to the processing of shared data.
- Advising on which laws should govern the NDA (and the applicable jurisdiction).
- Negotiating the NDA.
- Practical measures to safeguard confidential information.
Our experienced and specialist NDA lawyers also consider how to ‘future-proof’ your NDAs to reflect your business’ anticipated evolution and growth.
Get expert legal support for your NDA
Confidential information can be critical, and its loss or misuse can be hugely detrimental to your business. NDAs are the unseen armour that protects your most prized assets, from trade secrets and pricing models to customer data and product development plans. While ChatGPT can support some initial groundwork, helping you explore what an NDA involves and brainstorm possible clauses to discuss with your solicitor, it cannot replace the legal accuracy and strategic thinking required to draft a sound agreement.
An AI-generated NDA may overlook key legal protections, fail to meet regulatory requirements, or include ambiguous language that opens the door to disputes. That’s why working with experienced commercial law solicitors is essential. We help you navigate complex issues like data protection, jurisdiction, and liability to produce clear, enforceable NDAs that genuinely protect your commercial interests.
If you're also wondering whether ChatGPT can help with drafting legal business terms, we’ve explored that topic as well in the context of using AI tools for contract work.
