NDA agreements in Poland: Essentials of confidentiality protection and violations

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NDA Agreements in Poland: Essentials of Confidentiality Protection and Violations

A Non Disclosure Agreement (NDA) is a legal contract that protects confidential information shared between parties from being disclosed to unauthorized individuals or entities. It covers various types of sensitive information, including business plans, financial data, customer databases, and IP, know-how our other proprietary knowledge.

NDAs in Poland are a common practice, typically concluded between companies intending to do business, approaching M&A transactions, or between employers and employees.

While Polish regulations, particularly the Act on Unfair Competition and the Labour Code, provide protection against misuse of confidential information, NDAs are a good practice as they clearly define the scope of confidential information and outline consequences for violations.

The most common types of NDAs in Poland
Confidentiality agreements: common types of NDAs in Poland

Common Types of NDAs in Poland

The most common types of NDAs in Poland include:

  1. NDAs between companies entering a business relationship: These often involve the sharing of intellectual property or know-how, such as in franchise agreements.
  2. NDAs with employees: These are used to protect confidential information of company that employees may have access to during their employment.
  3. NDAs as part of M&A transactions: These protect sensitive information during the negotiation and due diligence phases of mergers and acquisitions.

All of these NDA types are generally governed by the same set of Polish regulations, with minor variations to suit each specific context.

Key Facts about Non-Disclosure Agreements (NDAs) in Poland

Key Fact Description
Name Non-Disclosure Agreement (NDA) / in Polish: Umowa o poufności
Legal Framework Governed by Polish Civil Code and other relevant commercial laws, incl. Labor Code and Act on Combating Unfair Practices
Purpose To protect confidential information and trade secrets
Parties Involved Disclosing Party (owner of confidential information) and Receiving Party (recipient of confidential information)
Common Uses Business negotiations, partnerships, employment agreements, joint ventures
Key Elements Definition of confidential information, obligations of receiving party, duration of confidentiality, exclusions, consequences of breach, choice of law and jurisdiction
Duration Typically specified within the agreement; can vary based on nature of information and agreement terms
Enforceability Enforceability in Poland depends on choice of law and jurisdiction which governs the agreement.
Penalties for Breach Can include damages, injunctions, and other remedies as specified in the agreement or under law
Exclusions Information that is public knowledge, independently developed, or received legally from a third party
Language Requirement Typically in Polish, but can be in other languages if agreed upon by parties
Jurisdiction Disputes generally resolved in Polish courts unless otherwise specified in the agreement
Notarization Not required, but can be done for additional legal formality and authenticity

What are mandatory requirements of NDA Contracts in Poland?

There are no mandatory elements for non disclosure agreements in Poland. Parties are free to agree on the terms of confidential disclosure agreements and its duration based on the principle of “freedom of contracting”. The agreed terms cannot be against “social co-existence rules,” which in practice means they have to be reasonable and justified.

For the non disclosure agreement to be valid, it must be executed by authorized signatories of the two or more parties involved. Additionally, the NDA should be concluded in writing to avoid challenges in proving its content in case of disputes.

In Poland, there are no required elements for a Non-Disclosure Agreement.
Protecting trade secrets: What are the mandatory elements of an NDA?

What are usual terms and conditions of NDA in Poland?

Non-Disclosure Agreements for effectiveness and enforceability shall clearly stipulate:

  1. Definition of Disclosing and Receiving Parties – to identify who is sharing the confidential information and who is receiving it.
  2. Definition of Confidential Informationto specifies what information is covered by the agreement, ensuring clarity on what must be protected.
  3. Channels of Communication – to introduce the procedures, incl. methods and authorized persons, through which confidential information can be shared.
  4. Duration of Confidentiality – to specify the time period during which the information must remain confidential, which can extend beyond the end of the business relationship. NDAs can vary from short-term (a few months) to indefinite durations depending on the nature of the information related and industry practices.
  5. Penalties for Breach of Confidentiality – to discourage the receiving party from violations and ensure fast recourse methods in case of breaches. Please note that in Poland if penalties are not explicitly specified in the agreement, courts will determine damages based on the proven loss, which can be challenging to quantify.
  6. Applicable Lawto specify which legal system governs the agreement, usually Polish law.
  7. Jurisdiction or Arbitration Clause – to determine how disputes will be resolved, either through specific courts or arbitration mechanisms, ensuring clarity and reducing potential legal conflicts.

Does an NDA have to be a separate contract in Poland?

No, an non disclosure agreement does not have to be a separate contract in Poland. NDA clauses can be included in other contracts and will have the same binding force.

However, it is a good practice in Poland to have non disclosure agreements with employees signed as separate contracts. When including NDA clauses in other contracts, it is crucial to stipulate the duration of confidentiality after the main contract lapses; otherwise, the confidentiality obligation might cease along with the main contract.

An NDA does not have to be a separate contract in Poland.
Defining confidential information: Does an NDA have to be a separate contract in Poland?

3 most important items to remember when signing an NDA in Poland

1. Define Precisely the Scope of Confidential Information

Polish courts take a stringent approach regarding the definition of confidential information. If the definition is too vague or not precise enough, courts in Poland tend not to provide remedies for breaches.

Therefore, it is crucial to clearly specify what information is considered confidential to ensure legal protection.

2. Stipulate Proper Penalties

In the absence of stipulated penalties, Polish courts may only adjudicate amounts that are strictly proved as losses. Courts of Poland rarely award damages for lost profits based on expectations or simulations.

Properly phrased penalties not only provide clear consequences for breaches but can also expedite the judicial process. Including a clause allowing claims above the accrued penalties for significant losses is advisable and should be drafted by a qualified attorney.

3. Choose Polish Law and Court or an Efficient Arbitration Court

Ensuring that the NDA specifies Polish law and a court or arbitration court that will quickly hear the case is crucial.

Mistakes in this respect may lead to situations where the court ruling is not immediately enforceable because it requires recognition or a separate procedure to be enforceable in Poland. This choice helps ensure that any legal actions are handled efficiently, and judgments are swiftly enforceable.

What if there is no NDA signed? Is confidential information still protected in Poland?

Yes, confidential information is still protected in Poland even without confidentiality agreement. The protection of confidential information is regulated under the Act on Combating Unfair Competition. The specific regulation states that it is forbidden to disclose, use, or obtain someone else’s business secret.

A business secret is defined as technical, technological, organizational information of an enterprise or other information that has economic value, which as a whole or in a specific combination and set of its elements is not commonly known to persons usually dealing with this type of information or is not easily accessible to such persons, provided that the person authorized to use such information or dispose of it has undertaken actions to keep it confidential with due diligence.

The remedies for breach of NDA in Poland
Legal action in NDA: Protecting your interests in Poland

What are the remedies for breach of NDA in Poland?

The remedies for a breach of an NDA should be stipulated directly in the agreement, and most commonly, these are contractual penalties. In addition to these penalties, claims and remedies can be formulated based on the Act on Combating Unfair Competition, which provides specific remedies for breaches of confidentiality:

  • Ceasing Unauthorized Actions: The court may order the cessation of any unauthorized actions
  • Removal of Consequences: The court may require the removal of the effects of unauthorized actions.
  • Public Statements: The court may order the infringing party to make a public statement or multiple statements as appropriate.
  • Damages: Compensation for damages according to general principles.
  • Restitution of Unjust Benefits: The court may order the infringer to return unjustly obtained benefits.
  • Financial Compensation for Social Purposes: If the act of unfair competition was intentional, the court may order the infringer to pay an appropriate sum for a specified social cause related to supporting Polish culture or protecting national heritage.

In cases of breach involving the disclosure of business secrets, the court may additionally order the infringing party to publicly announce the court’s verdict, provided it is justified by the circumstances, such as the method of infringement, the value of the information, and the impact of the breach. The public announcement must not disclose the business secret itself.

Compare NDAs and Non-Compete Agreements: Legal tools for business confidentiality
NDAs and Non-Compete agreements: Key differences in protecting trade secrets and business practices

NDA vs. Non-Compete: what are the differences?

NDAs and non-compete agreements are completely different contractual obligations, although they often go together. An NDA protects confidential information, ensuring that sensitive business information is not disclosed to unauthorized parties.

In contrast, a non-compete agreement prevents an individual or company from engaging in a competing business. Non-compete agreements are more stringently regulated and often require compensation to be valid. If an NDA is not followed by a non-compete agreement, this means that a person or company can run a competitive business but still has to obey confidentiality obligations.

Is the employee in Poland obliged to keep confidential information even If no NDA is concluded?

Yes. In Poland, a written non disclosure agreement increases the clarity of the two parties’ obligations, but the obligation to keep business secrets confidential is statutory and implied from the Labor Code and the Act on Combating Unfair Competition.

Even if there is no non disclosure agreement or confidentiality clause in the employment agreement, the employee is under a confidentiality obligation. Breach of this obligation can lead to claims listed in the Unfair Competition Act and can also result in disciplinary dismissal. Therefore, employees must maintain the confidentiality of business secrets, regardless of whether an explicit confidential disclosure agreement is in place.

To avoid any doubt, the duration and further binding force of the confidentiality obligation should always be expressly stipulated in the contract.

When should an NDA be signed in Poland?

There is no statutory regulation regarding the specific timing of concluding an NDA in Poland. However, it is good practice to sign NDAs at an early stage of cooperation.

In the case of transactions, NDAs should be signed prior to the disclosure of any information and before signing a letter of intent. For employment, NDAs are usually part of the onboarding process and are signed together with the employment contract.

Is a confidentiality clause binding in Poland after expiry of the main contract?

The duration of a confidentiality clause should always be expressly agreed upon between the parties. As a general rule, such a clause expires along with the main contract.

However, depending on the circumstances and content/objectives of the agreement, the court may decide otherwise. To avoid any doubt, the duration and further binding force of the confidentiality obligation should always be expressly stipulated in the contract.

Is a foreign NDA enforceable in Poland?

The enforceability of a foreign non disclosure agreement in Poland depends primarily on the agreed jurisdiction of the court or arbitration clause. Judgments of EU courts are automatically enforceable in Poland, while judgments from other non-EU courts may require recognition if there is no bilateral agreement or other facilitating treaty.

It is recommended to consult with a Polish litigation attorney to ascertain the enforceability of a foreign NDA in Poland. If the parties did not agree on the jurisdiction of a particular court, it is usually possible to sue and enforce the non disclosure agreement if the infringing party is located or lives in Poland, or if the infringement took place in the territory of Poland.

Benefits of concluding NDA
Enhancing trust and legal security: The advantages of a confidentiality agreement as a legal agreement for proprietary information

Can I use my foreign template of NDA in Poland?

Most probably, yes. However, ensure that the definition of confidential information is precise, include penalties in the contract, and verify with a Polish attorney if the selected law and jurisdiction will allow immediate enforceability of the agreement in Poland.

What are the benefits of concluding NDA?

NDAs offer several benefits, including:

  1. Increased legal protection of the confidential information.
  2. Increased trust and nature of relationship.
  3. Provides clearly what information are valuable and protected.
  4. Provides safe channels and procedures of information exchange.
  5. Provides clear sanctions for infringements.
  6. Secures and expedites process of enforceability if case of infringements.
Expert team leader DKP Legal Michał Dudkowiak
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