a non-disclosure agreement (also known as a ‘confidentiality agreement’) is a legal contract that offers protection where two or more parties will be disclosing confidential information to each other. this two-way non-disclosure agreement (nda) offers protection when two businesses want to share information with each other but need to ensure the information goes no further. an nda protects this information by stating that anything confidential that is shared between the parties will not be shared with others (except in prescribed circumstances). almost any type of information can be confidential information. you can protect both commercial information and personal information. when drafting a confidentiality agreement you must state the purpose of creating the nda (the disclosure) to the other party. the purpose of disclosing the information must be legitimate and for specific reasons.

but the path to doing so safely is making sure that the other party is bound to respect the confidential information provided and not use it to the disclosing party’s detriment. if it’s an agreement where only one side is providing confidential information, then the disclosing party can be referred to as the disclosing party, and the recipient of the information can simply be referred to as the recipient. and, if the nda does not, it should at least have a provision that allows for the recipient to quickly obtain consent from the disclosing party to the sharing of confidential information with specified third parties (which consent should not be unreasonably withheld or delayed). sometimes a recipient of confidential information will seek to add a “residuals” clause to an nda so that certain information that the recipient’s team learns from the disclosing party and that is retained in the “unaided” memories of the team members is not treated as confidential.

if any of the bound parties break an nda, the party that released or used the information for their personal benefit may be liable for monetary damages. the main difference is that a non-disclosure agreement (nda) prohibits an individual from releasing information to a competitor while a non-compete agreement does not allow the individual to be employed by a competitor. if there is a breach of confidentiality the party that disclosed the information may be liable for monetary damages depending on the severity. misappropriation – an individual or entity that uses confidential information for their own use or shares with a 3rd party. an nda is a form that can either be written by yourself or with the help of an attorney.

a non-disclosure agreement (nda) is a legally enforceable contract that establishes confidentiality between two parties—the owner of protected information and the recipient of that information. ndas are an almost surefire way to confirm that confidential information stays protected in a variety of situations. a non-disclosure agreement lets the recipients of your proprietary information know that you expect confidentiality and it authorizes you to take legal action if the contract is violated. in the case of new product or concept development, a confidentiality agreement can help the inventor keep patent rights. in many cases, the agreement serves as a document that classifies exclusive and confidential information.