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Written by:
Antim Amlan
Published on


You must have been asked to keep a secret before and you might have kept it as well out of love or affection or for the sake of the bond that you share with that person. A Confidentiality Agreement, also called a Non-Disclosure Agreement or NDA, takes the notion of keeping a secret even further. This contract creates a legal obligation to privacy. Nowadays NDAs are very common in many business settings, as they offer one of the surest ways to protect trade secrets and other confidential information meant to be kept secret.

What is a Non-Disclosure Agreement?

In simple words, a Non-Disclosure Agreement is a legally enforceable, written contract by which one or more parties agree not to disclose confidential information that they have shared with each other as a necessary part of doing business together.

It is a legal contract between two parties that outlines confidential information that the parties wish to share with one-another for certain purposes, but wish to restrict other’s use or access to.  Basically, the parties agree to not disclose the information covered by the agreement.  For example, a company can ask a freelance writer to sign an NDA that states that all information gathered while writing and in the writing itself, is confidential information until the company chooses to use it.


Common NDA Content

The type of information covered by an NDA is virtually unlimited. The Content of an NDA varies depending on who the signing party is and considerations regarding what private information the signatory may be exposed to. Each NDA should be tailored to the specific relationship. Each employee, client or potential investor is different and therefore, how you approach each situation requires consideration of different legal aspects and business strategy.

Regardless of its function or the information it protects, there are some basic clauses or content which is almost same in all NDAs which is as follows:

  • Name of the parties involved
  • The definition of what is confidential- this can be very vague for the purpose of being all-inclusive (e.g. Information commonly protected by NDAs might include schematics for a new product, client information, sales and marketing plans or a unique manufacturing process)
  • The disclosure period (e.g. 3 years or forever)
  • Any exclusions from what must be kept confidential (i.e. materials already available to the public or things which can be disclosed which are usually immaterial to your business)
  • Any obligations to keep the information confidential
  • Any miscellaneous provision


Why an NDA is Important

Non-disclosure agreements are extremely important for all types of business deals.  It is especially useful for small businesses and start-ups who will most likely outsource a lot of work to contractors or freelancers.  It can also be important if you plan on utilizing consultants to get some business ideas.

For example, if you are developing a new product or writing content or otherwise developing something for sale, you may need to hire someone to help.  Maybe it is a freelancer, a consultant, or some factory developing your prototype. At that point of time, you don’t want the person or company to steal your product or other information and sell it themselves. Imagine if Apple developed the iPhone and did not ask the manufacturer to sign an NDA and the manufacturer would have made a generic iPhone and sold it themselves.    The same is true for any type of product development.

Using a nondisclosure agreement means your secrets will stay protected and if not then you will have legal recourse and can sue for damages.

NDAs typically serve two key functions:

  • NDAs protect sensitive information. By signing an NDA, parties promise not to share information any further which has been shared with them. If the information is leaked, the aggrieved person can claim damages for breach of contract.

In the case of a new product or concept development, properly drafted NDA can help the original creator hold onto the rights to a product or idea. In other words, it deters theft of intellectual property.