Non-Disclosure Agreement | Meaning and Definition

What is a Non-Disclosure Agreement?

A confidentiality agreement, popularly known as the non-disclosure agreement, is an agreement signed between two or more parties when some confidential information is being shared. This agreement restricts the signing parties from making any confidential information shared with them known to another person or the public at large.

Non-Disclosure agreements or NDA agreements are often signed by new clients to a business if they are availing of a service that requires the firm to make any data or information available to them.

A non-disclosure agreement is legally binding upon all parties and is often a key feature of mergers between companies and other types of business deals. However, certain companies may also ask employees to sign an NDA agreement either during the hiring process or afterward when the employers need the employees to maintain certain confidentiality.

The idea is to ensure that no confidential information reaches a competitor or is used by a party to the NDA to harm the company sharing the confidential information or data.

The language of the Non-disclosure agreement plays a very important role in matters of a legal bent. As such, depending upon the nature of the deal for which it is being created, the language and words used in the NDA agreement are carefully picked by the attorneys in charge of drafting this contract. Upon conflict, the language used in the NDA agreement can help decide the liabilities and obligations of the parties and whether or not any party was in violation of the terms.