Non-Disclosure Agreement

Non-disclosure agreements are formal agreements that restrict the sharing of information disclosed between two parties to any third party without prior consent.

NDAs are also known as:

• Confidentiality agreements (CAs)
• Confidential disclosure agreements (CDAs)
• Croprietary information agreements (PIAs)
• Secrecy agreements (SAs)

They are in common use both within an organization (between an organization and its employees) and between organizations such as customers, contractors, suppliers, business partners and other associates. Typically, these involve some type of master or overarching agreement for the relationship between the organizations, which requires NDAs to be signed by the individuals in each organization that requires access to the others' protected or sensitive data.

An NDA is a binding legal document restricting information disclosed by the signing parties. These are the key types of NDAs:

BILATERAL NDA

A bilateral NDA is a two-sided NDA (also known as a mutual-NDA or two-way-NDA) that has two parties each sharing information with one another. This type of information exchange is common when two businesses consider working together on a joint venture, merger or acquisition.

NON-COMPETE AGREEMENT (NCA)

A non-compete agreement (NCA) is similar to an NDA in that it binds the parties to not enter into activities of any kind that would be directly in competition with the other party's activities, as specified in the non-compete agreement. For example, a systems security services company might contract with a software developer to design and build a new form of threat- modeling and detection system, for the security company's exclusive use. The NCA could restrict the developer from marketing their own version of the same capabilities, even if it is a substantially different approach, within a specified market for a specified period of time. NCAs are often used by employers to keep employees from learning the company's know-how and taking it outside to a new employer, or to use in starting their own business.

UNILATERAL NDA

In a unilateral NDA, only one party discloses information to another party. That is the case with an organization signing an NDA with an employee - the organization shares information with the employee that the employee is not to share with others. The employee in this scenario does not share information with the organization.

MULTILATERAL NDA

A multilateral NDA is used when three or more parties want to share information with no fear of that information being disclosed by the other parties.