If you ever wondered what is non-disclosure agreement, then here is some useful information that will help you familiarize with it.
Meaning of non-disclosure agreement
Non-disclosure agreement (NDA) is a legal document (contract) between two or more parties that agree upon not to disclose the sensitive or secret information that was shared amongst them. Non-disclosure agreement is also known as confidentiality agreement (CA), proprietary information agreement (PIA), confidential disclosure agreement (CDA), secrecy agreement (SA).
Non-disclosure agreement types
There are two main types of non-disclosure agreement (NDA) mutual and unilateral:
Mutual non-disclosure agreement (which is less common) is generally used when companies search for potential alliances like partnership, collaboration, merger or purchase and both sides require to share susceptible information with the other due to make decision about mentioned relationship.
Unilateral non-disclosure agreement, is generally used when arrangement is made one way, meaning when only one side is disclosing secret information, E.g.: when a restaurant reveals secret recipe to a new cook or a company reveals marketing secrets and tricks to an advertisement agency etc. It all means that only one side agrees to protect and not reveal the other side’s sensitive information.
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Signature of non-disclosure agreement
Signing a non-disclosure agreement legally binds all parties involved and makes sure that none of the information that is included in the mentioned contract will be accessible to the third parties. Mainly, non-disclosure agreements are signed in the beginning of a business alliance, for instance, when an employee is recruited. Agreements can also be signed at the end, such as, when a partner has decided to leave, but at this stage it may become harder to negotiate.
Benefits of non-disclosure agreement
It safeguards the disclosure of secrets, proprietary and other confidential information, reduces chances of information leakage, by what helps to protect the organization in general.
You can download our free forms of non-disclosure agreement i.e. template for confidentiality agreement in PDF or Word format below: