NDA

NDA, short for non-disclosure agreement, is a legally binding contract in which one or more parties commit to keeping specified information confidential. NDAs are commonly used in business, research, employment, and negotiations to protect sensitive data such as trade secrets, proprietary software, product plans, and customer lists.

A typical NDA identifies the disclosing and receiving parties, defines confidential information, and imposes obligations to limit access, use the information only for a stated purpose, and secure copies and transmissions. It often requires notification of any unauthorized disclosures and may require return or destruction of materials on termination. Exclusions usually include information already public, independently developed information, information received from a third party without breach, and information required to be disclosed by law.

NDAs vary in type. Unilateral or one-way NDAs protect information disclosed by one party; mutual or bilateral NDAs involve reciprocal disclosure; multilateral NDAs involve three or more parties. The term of confidentiality and the geographic scope are typically specified, with trade secrets potentially protected indefinitely under applicable law.

Enforcement can include injunctive relief, damages, and attorneys’ fees. Courts assess reasonableness of the scope, duration, and defined information; overly broad terms or perpetual restrictions may be unenforceable in some jurisdictions.

Limitations and best practices emphasize tailoring NDAs to legitimate business needs, avoiding unnecessary restrictions, and including carve-outs for whistleblowing and required disclosures to authorities, as well as clear provisions for handling confidential material.

Alternative uses of the acronym NDA include political parties and military academies in various countries, but this article covers the non-disclosure contract.