This agreement goes by many names - a confidentiality agreement, a proprietary information agreement or a secrecy agreement. In essence, it is a legally enforceable contract between a minimum of two parties - companies, individuals, or other entities (such as partnerships, societies) who are considering doing business with each other. In certain scenarios, the need to understand the processes used in each other's business for the purpose of evaluating the potential business relationship becomes more important.
Non-disclosure agreements typically serve three key functions:
- The protection of sensitive information. Through signature, parties undertake to not divulge or release information shared with them. If the information is leaked, the affected person can claim breach of contract.
- In the case of new product or concept development, a confidentiality agreement can help the inventor protect patent rights. In many cases, public disclosure of a new invention can void patent rights. A properly drafted document can help the original creator hold onto the rights to a product or idea.
- These agreements expressly outline what information is private and public.
The type of information protected by an NDA is virtually unlimited. In fact, any knowledge exchanged between those involved can be considered confidential and protected. As far as digital information requires protection, NDA’s can protect - applications, websites, databases, software, passwords, system specifications, designs and intellectual property.