Confidentiality Agreements Definition
A confidentiality agreement (also known as a nondisclosure agreement or NDA) is a legally binding contract between two parties in which one party agrees to not share information deemed confidential by the other party. The purpose of a confidentiality agreement is to protect sensitive information from being shared with unauthorized individuals and to prevent the unauthorized use of that information.
Confidentiality agreements are often used in business settings, such as when two companies are considering doing business together or when an employee is hired by a new company. In these situations, the parties may exchange confidential information, such as trade secrets or proprietary information, in order to assess whether there is a potential for a business relationship. If the parties decide not to pursue a business relationship, the confidentiality agreement ensures that the confidential information exchanged during the negotiations will not be disclosed to any third party.
There are also many other situations in which confidentiality agreements may be used. For example, patients may sign a confidentiality agreement with their doctor or lawyer-client privilege prevents attorneys from disclosing confidential information exchanged between them and their clients.
