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Definition of Non Disclosure Agreement:

Non-disclosure agreement, also known as NDA, confidentiality agreement, or proprietary information agreement is a legally binding contract between 2 or more parties. In an NDA, the concerned parties agree to maintain confidentiality of the information shared, obtained, and restrict its access to others. 

NDAs are commonly seen when businesses come together, or during negotiations. NDAs ensure that the information doesn’t end up with competitors or other parties who can misuse the information. This is called a mutual non-disclosure agreement. In some cases, a single party may be restricted from disclosing. For instance, employees are required to sign NDAs with employers, to prevent the disclosure and dissemination of company information. This is called a non-mutual disclosure agreement. That said, NDAs cannot be enforced for illegal activities.

Essential elements of an NDA

The following information is essential while constructing an NDA:

  • Names of the parties involved
  • Information that is deemed confidential
  • Exclusions from confidentiality
  • Time period
  • Appropriate uses of the confidential information
     

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