What is a confidentiality or non-disclosure agreement?
A non-disclosure agreement (NDA), also known as a confidentiality agreement (CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA), or secrecy agreement, is a legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to or by third parties. It is a contract through which the parties agree not to disclose information covered by the agreement. An NDA creates a confidential relationship between the parties to protect any type of confidential and proprietary information or trade secrets. As such, an NDA protects nonpublic business information.
NDAs are commonly signed when two companies, individuals, or other entities (such as partnerships, societies, etc.) are considering doing business and need to understand the processes used in each others business for the purpose of evaluating the potential business relationship. NDAs can be “mutual”, meaning both parties are restricted in their use of the materials provided, or they can restrict the use of material by a single party.
It is also possible for an employee to sign an NDA or NDA-like agreement with an employer. In fact, some employment agreements will include a clause restricting employees’ use and dissemination of company-owned “confidential information.”
Confidentiality agreements are used in a range of situations where it is necessary to ensure commercial secrecy such as in the case of the sale of a business where it is essential that the trade secrets of the business being sold are protected from competitors posing as interested buyers or in the case where contractors are hired to work on sensitive areas of business where it is necessary to protect sensitive commercial information from disclosure to competitors. There are many other examples of where confidentiality agreements are very useful in order to protect the interests in the intellectual property of a business which has been built up over many years and is a very valuable part of a business.
Please click on the links available here in order to download templates for confidentiality agreements.