Legal Term Glossary
What is an NDA?
A non-disclosure agreement binds one or both parties to keep information confidential. Duration, scope, and mutual obligations vary by contract.
A non-disclosure agreement (NDA) is a contract that restricts disclosure of confidential information to third parties. NDAs can be one-way (one party obligated to keep secrets) or mutual (both parties bound). They define what counts as confidential, for how long, and under what exceptions.
Definition and structure
An NDA establishes a legal obligation to maintain confidentiality about defined information. The agreement specifies the scope (what's confidential), duration (how long the obligation lasts), and permitted uses. Breaches can trigger injunctive relief or damages claims. NDAs appear in employment, vendor relationships, M&A diligence, and licensing deals.
One-way vs mutual NDAs
A unilateral NDA binds one party only—often an employee or vendor receiving sensitive company data. A mutual (bilateral) NDA restricts both parties from disclosing each other's confidential information. Most commercial negotiations use mutual NDAs to protect both sides equally.