What Is an NDA?

A Non-Disclosure Agreement (NDA), also called a confidentiality agreement, is a contract that creates a legal obligation to keep certain information confidential.

Types of NDAs:

Unilateral (one-way) — One party discloses confidential information, and the other agrees to keep it secret. Common in employment and vendor relationships.

Mutual (two-way) — Both parties share confidential information and agree to protect each other's disclosures. Common in business negotiations and partnerships.

Key provisions:

Definition of confidential information — What is and is not covered. Should be specific enough to be enforceable.

Obligations — How the receiving party must treat the information (e.g., same care as their own confidential information).

Exclusions — Information that is not covered (publicly available information, information already known, information received from a third party).

Duration — How long the obligation lasts (typically 2-5 years, or indefinitely for trade secrets).

Remedies — What happens if the NDA is violated (typically injunctive relief and damages).

Common uses:

Discussing a potential business deal or partnership

Hiring employees who will access trade secrets

Sharing information with contractors or vendors

Investor pitches

Mergers and acquisitions due diligence

Enforceability considerations:

Must define confidential information clearly

Must be supported by consideration (something of value exchanged)

Cannot be used to hide illegal activity

Duration must be reasonable

This is legal information, not legal advice.