What is a Non-Disclosure Agreement or NDA?

QandAs: Legal

Answer:
If your in research and development or mergers and

acquisitions then there is no doubt you've been approached to sign an NDA. An NDA or Non-Disclosure Agreement is a drafted, legally binding contract between multiple parties that protects the information or data being shared.

Let's say you own a business and you are approached by a potential buyer. For the buyer to do their due diligence they will need business details. The business details may include revenues, product details, client information, trade secrets or anything that you wouldn't normally make publicly available. To ensure the potential buyer doesn't use this information for their benefit or disclose this information to a third party you have them sign a non disclosure agreement. The non-disclosure agreement basically says that, we'll show you private things about our business but you have to agree to keep this information within your organization.

Today there are MNDA's or Mutual Non-Disclosure Agreements. These are issued when both parties share information they would like to protect.

You can purchase an NDA on the Internet or better yet have your Attorney draft one that's specific to your business.