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A non-disclosure agreement (NDA) is a legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to or by third parties.
Several businesses have confidential information that they do not want to share. However, while working with independent contractors, third party vendors or entering into joint ventures, they need to divulge such information. This is where an NDA comes into force.
An NDA maybe unilateral or bilateral. A unilateral NDA is where one party discloses information to another party. In such agreements, the receiving party must guarantee that they will protect all knowledge and information they are privileged to in their business operations. An example of a unilateral NDA is when a business owner prepares to sell his business and must disclose financial records to potential buyers, or when an auditor is checking financial records. In cases where multiple parties are divulging confidential information to each other, a bilateral NDA maybe signed. An example of this would be when businesses are getting into a joint venture.
A standard NDA includes the sensitive information to be disclosed, terms of agreement such as the time period of the agreement’s legitimacy; types of permissible disclosures, consequences and waivers that affect the agreement; and any other information vital to the agreement’s relevancy, and the signatures of all parties involved.
• A Non-disclosure agreement serves to keep information confidential
• It basically comes in 2 types: unilateral, bilateral
• Many businesses require their staff to sign NDAs
Source: Dipshikha Mitra, Special to Classifieds
The writer is a freelancer