What is a nondiclosure agreement?

A nondisclosure agreement is also known as a confidentiality agrrement, confidential disclosure agreement (CDA) or secrecy agreement. A non disclosure agreement is a legal contract entered into by two or more persons or organizations. The object of the agreement is to rule that certain type of information that is intended to be passed from one party to the other party should stay confidential between the parties and should not be revealed by the receiving party. It should also cover information that might be created in the process of a joint undertaking, such as inventions. A confidentiality agreement shall prevent a party receiving confidential information such as private or corporate secrets (technical know-how, internal business processes, costs and pricing calculations), suppliers, customer names and addresses and other sensitive details from using, selling, sending and talking about the received information.

Mutual non-disclosure agreements

Such agreements are often used when parties wish to share information for example in order to evaluate potential business relationships in preparation of joint ventures, mergers, aquisitions, or license agreements. These kind of non discloure agreements, where both parties mutually exchange information are called mutual non disclosure agreements.

Unilateral non-disclosure agreements

Allthoug the best protection for inventions is to first file a patent application and approach potential manufacturers or financial backers after a first patent application was filed, some inventors may need technical information or financial support to complete their invention. In such cases a non disclosure agreement will avoid that information passed to another party would be deemed as making the invention available to the public, which inevitably would sabotage the novelty of an invention. As manufacturers or financial parties are sometimes very reluctant to sign a mutual agreement (although it would give themselves protection) a one-sided agreement may be achieved between the inventor and the other side that obliges the other party not to disclose any secret information received from the inventor.