NDA Breach in Ontario: What Happens When Confidential Information Is Disclosed

You shared proprietary business information under a non-disclosure agreement (NDA). Now that information has been passed to a competitor, used against you in negotiations, or published without your consent. A breach of an NDA in Ontario can cause real, immediate business harm — and the law gives you tools to stop it and recover your losses.

This article explains how courts approach NDA breaches, when an injunction is available, what damages you can recover, and what to do if your confidential information has been misused.

What Is an NDA?

A non-disclosure agreement (NDA) — also called a confidentiality agreement (CA) — is a contract in which one or more parties agree to keep designated information confidential, to use it only for specified purposes, and not to share it with third parties without consent.

NDAs are common in:

• Business negotiations and due diligence
• Employment (joining a company or leaving one)
• Technology licensing and development agreements
• Partnerships and joint ventures
• Investor presentations

The enforceability of an NDA depends on its terms and on the nature of the information protected.

What Information Can an NDA Protect?

Not every piece of information qualifies for NDA protection. For a confidentiality obligation to be enforceable, the information must generally be:

• Actually confidential — not already in the public domain
• Treated as confidential — the disclosing party must have taken steps to keep it secret
• Defined clearly enough in the NDA that the receiving party knew what they were agreeing to protect

Broad catch-all language (e.g., "all information of any kind") is sometimes challenged as too vague. A well-drafted NDA defines confidential information with specificity while including appropriate catch-all provisions.

Common Types of NDA Breaches

Disclosure to Competitors

A prospective buyer reviews your confidential financial records during due diligence, walks away from the deal, and shares what they learned with a competitor. Classic breach.

Using Information for Unauthorized Purposes

A development partner uses proprietary technical specifications shared under an NDA to build their own competing product rather than the joint project you discussed.

Employee Misuse After Signing a Confidentiality Agreement

A departing employee takes customer lists, pricing models, or proprietary processes covered by their employment confidentiality agreement and uses them in a new role or business.

Disclosure to the Media or Public

In public-facing NDAs (e.g., settlement agreements with non-disclosure terms, or media and celebrity NDAs), direct disclosure to the press or public constitutes breach.

Remedies for NDA Breach in Ontario

Injunction: Stopping the Harm in Its Tracks

If confidential information is being actively misused or further disclosure is imminent, an injunction is often the first priority. Courts can grant:

• An interim injunction (emergency, granted quickly, without notice in urgent cases)
• An interlocutory injunction (granted on motion, pending trial)
• A permanent injunction (granted at trial)

To get an interlocutory injunction, you must show:

1. A serious question to be tried (your NDA claim has a real basis)
2. Irreparable harm — money alone cannot fix the damage (often true for leaked trade secrets or confidential processes)
3. The balance of convenience favours restraining the defendant

Courts take NDA breaches seriously and injunctions are regularly granted where ongoing disclosure would cause irreparable harm.

Damages: Compensating for Loss

Where the disclosure has already occurred, damages can include:

• Lost profits — business lost because competitors gained access to your information
• Lost licensing revenue — if you had planned to license the information
• Reasonable royalty — courts sometimes award a notional royalty for the use of the confidential information
• Wasted costs — money spent in the transaction that you would not have spent had you known the NDA would be breached

Account of Profits

If the party who breached your NDA made money using your information — for example, by building a competing product — you may be entitled to an account of those profits, forcing them to hand over what they earned rather than proving your own loss.

Breach of Confidence (Without a Written NDA)

Ontario courts also protect confidential information in equity through the common law doctrine of breach of confidence, even without a signed NDA. If information was conveyed in circumstances clearly imposing an obligation of confidence, courts will protect it. This is particularly useful when there is no formal agreement.

Steps to Take Immediately After an NDA Breach

1. Document the breach. Preserve evidence of the disclosure — screenshots, emails, publications, whatever shows that your information was shared or misused.
2. Assess the ongoing risk. Is the breach ongoing (information still being used or spread), or is it a past event? Ongoing breaches are more likely to warrant emergency injunctive relief.
3. Send a demand letter. A cease-and-desist letter from a lawyer demands that the breaching party stop all further disclosure and preserve evidence. It also establishes a record for subsequent litigation.
4. Quantify your loss. Work with your accountant to estimate lost business, wasted investment, or other damages.
5. Consult a lawyer immediately. Time matters — both for injunctive relief and for limitation periods (verify current limitation periods with your lawyer).

Frequently asked questions