Non Disclosure Agreements Definition and Example

Non-Disclosure Agreements (NDA) are legal documents that protect a company’s sensitive information and trade secrets. These agreements are signed by employees, contractors, and third-party vendors who may have access to a company’s confidential information. The purpose of an NDA is to prevent the unauthorized use or sharing of confidential information by the parties who have access to it.

The definition and example of an NDA

A Non-Disclosure Agreement (NDA) is a legal document that binds parties to keep confidential information private. These agreements are typically used when one party is revealing sensitive information to another party, and both parties want to ensure that the information remains confidential.

For example, let`s say that a company is showing its new product designs to a potential investor. The investor needs to sign an NDA to ensure that they won`t share the designs with anyone else. This way, the company can protect its trade secrets and prevent competitors from stealing their ideas.

An NDA typically outlines the following:

1. The parties involved.

The NDA identifies the parties involved in the agreement. This may include the company revealing its confidential information and the person or persons who will have access to that information.

2. The information covered.

The NDA defines what information is considered confidential, including trade secrets, proprietary information, and other sensitive data.

3. The purpose of the NDA.

The NDA defines the purpose of the agreement and why confidential information is being shared.

4. The duration of the NDA.

The NDA specifies how long the confidentiality agreement will remain in effect. This can range from a few months to several years.

5. Consequences of breaking the NDA.

The NDA outlines the penalties for breaking the agreement, which can include damages or legal action.


Non-disclosure agreements are essential for protecting a company`s trade secrets and confidential information. These agreements help to maintain trust between parties and prevent unauthorized use or sharing of confidential information. By clearly defining the terms of the NDA, both parties can feel confident that their interests are being protected. If you need to share sensitive information with another party, creating an NDA can help ensure that your information stays confidential.