What is a non-disclosure agreement (NDA)?
A non-disclosure agreement (NDA) prohibits a party from revealing confidential information learned during a relationship.
An NDA is a contract that keeps confidential information from being shared.
Where the word "Non Disclosure" comes from
Non-disclosure agreements developed from the law of trade secrets and confidential relationships. They formalize the duty to keep information secret, and modern business practice uses them to protect everything from product plans to customer lists and financial data.
Why Non Disclosure matters
It lets businesses share sensitive information safely with employees, contractors, and partners. By defining what is confidential and what happens on breach, an NDA makes misuse actionable and deters leaks.
Common confusion about Non Disclosure
An NDA does not protect information that is already public, independently developed, or required to be disclosed by law. The agreement's definition of confidential information, and its exclusions, determine exactly what is covered, so parties often disagree at the edges.
A real-world example of Non Disclosure
You meet with a startup to discuss a possible investment, and you sign an NDA covering its product plans and financial projections. If you later use that information for your own project, the startup can sue for breach and misappropriation.
A worked example of Non Disclosure
A manufacturer shares its new product design with a packaging supplier under an NDA. The supplier uses the design for another client, and the manufacturer sues. The court enforces the NDA if the design was clearly identified as confidential and the supplier's use breached the stated limits. Had the design already been published at a trade show, the NDA would not cover it, which is why the agreement must identify the protected material precisely.
How Non Disclosure works in practice
When signing an NDA, read the definition of confidential information, the exclusions, and the term, because broad definitions can cover your general knowledge. When drafting one, identify the information precisely, limit the use to the stated purpose, and include remedies for breach. Mark confidential documents clearly and limit access, because the best NDA is one you never have to enforce. Courts also consider whether the information was actually secret and whether reasonable efforts were made to keep it secret, so a company that fails to protect its own data weakens its claim to protection later.
Questions about Non Disclosure
What happens if I break an NDA?
You may owe damages or face an injunction.
Are NDAs always one-way?
No — mutual NDAs protect both sides’ information.
How long does it last?
As stated; some survive indefinitely for true secrets.