Non-Disclosure Agreement (NDA) Form

A non-disclosure agreement, or NDA, protects your business by establishing a confidential relationship with another party, such as a contractor or potential investor. With a signed NDA, your business can discuss, collaborate, hire, and pitch ideas without worrying about the other party passing on any sensitive business information you share.

Table of Contents

• What Is an NDA?
• Why Do You Need an NDA?
• When Do You Use an NDA?
• What to Include in an NDA
• Non-Disclosure Agreement FAQs

What Is an NDA?

A non-disclosure agreement (NDA) is a type of legal contract used by businesses or individuals to protect confidential business information. It is legally enforceable and establishes a confidential relationship between two parties—similar to the relationship between a doctor and a patient or an attorney and a client.

The parties of an NDA can be an individual or a company, and they typically include the owner of proprietary information and the recipient. Both agree not to disclose sensitive information they receive during their business with each other.

Why Do You Need an NDA?

Every business has proprietary material that needs to be kept private in order to maintain a competitive advantage. Examples include:

• Client information or customer lists
• Potential leads
• Trade secrets
• Manufacturing processes
• Proprietary software
• Business plans
• Marketing strategies and advertising techniques
• Intellectual property
• Accounting information

Sometimes, a business must share sensitive information with other parties. An NDA prohibits the signing parties from stealing, selling, or sharing that information with competitors or third parties. In case of an unauthorized disclosure, the NDA agreement allows the affected party to take legal action against the breaching party.

When Do You Use an NDA?

Businesses often use NDAs in the following situations:

• Licensing or selling a product, technology, or other intellectual property
• Onboarding employees or independent contractors
• Interviewing job candidates
• Exploring a potential partnership or investment
• Negotiating a merger or acquisition
• Establishing a relationship with a new client or service provider

What to Include in an NDA

All NDAs should include the following details:

• Who is disclosing and who is receiving confidential information
• What counts as confidential information
• Any exceptions to confidentiality
• What the recipient can and cannot do with the confidential information
• What happens if the recipient breaches the agreement
• How long the confidentiality agreement will last
• Any special clauses related to how information or disputes will be handled

Non-Disclosure Agreement FAQs

What happens if you break an NDA?

If you break an NDA, you can be sued by the other party. The NDA itself may outline other potential consequences, such as losing your job or paying a fine. You may also be subject to criminal prosecution if your breach involves trade secrets.

How long do NDAs last?

NDAs can last for a set time or indefinitely. The terms of an NDA should specify how long it lasts and what, if any, conditions will trigger its expiration.