A non-disclosure agreement (NDA), also known as a confidentiality agreement, is a legal document that establishes a confidential relationship between two or more parties. It is used to protect confidential or proprietary information that is shared between the parties.
NDAs can be unilateral, where only one party is disclosing confidential information, or bilateral, where both parties are disclosing confidential information to each other.
The agreement typically includes provisions that:
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Define the confidential information: This includes any information that is disclosed during the course of the agreement.
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Specify the purpose of the agreement: This outlines the reason for the parties sharing the confidential information.
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Define the parties involved: This includes the parties who are bound by the agreement.
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Specify the duration of the agreement: This outlines how long the agreement will be in effect.
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Establish the consequences of a breach: This outlines what will happen if a party breaches the agreement, including any damages or penalties that may be imposed.
NDAs are commonly used in business settings, such as when two companies are discussing a potential partnership or when an employee is leaving a company and has access to confidential information. They are also used in research and development settings, where sensitive information may be shared between parties.