A Non-Disclosure Agreement (NDA) is a legal contract that prevents someone from sharing confidential information. It’s widely used in business to protect trade secrets, proprietary data, and private communications.

NDAs are common when:

• Discussing partnerships or funding
• Hiring freelancers or employees
• Working with vendors or contractors
• Sharing prototypes, business plans, or source code

Types of NDAs:

• Unilateral: One party shares confidential information (most common)
• Mutual: Both parties share and protect each other’s information
• Multilateral: More than two parties involved (used in joint ventures)

What’s included in an NDA:

• Definition of confidential info
• Exclusions (e.g., public info, previously known data)
• Obligations of the receiving party
• Time frame for confidentiality
• Consequences of violation (e.g., legal damages)

Benefits:

• Builds trust when sharing sensitive ideas
• Reduces risk of intellectual property theft
• Strengthens your negotiation position

Without an NDA, you may have no legal recourse if someone steals your ideas or leaks sensitive data.

Always customize NDAs to fit the situation—and don’t use generic templates without reviewing them with legal counsel. NDAs are an inexpensive way to protect your innovation and competitive edge.