non-disclosure agreement (nda)
Definition
A non-disclosure agreement is a legal contract where one or both parties promise to keep certain information private and not share it with outsiders. Businesses use these to protect sensitive information like trade secrets, customer lists, pricing strategies, or new product ideas when they need to share that information with someone else.
Example
If you bring in a contractor to help build your new software platform, you would have them sign an NDA before showing them your proprietary code so they cannot take that knowledge to a competitor.
Watch Out
Make sure your NDA clearly defines exactly what information is considered confidential, because vague language can make the agreement very difficult to enforce if someone shares your secrets.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.