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What is Non-Disclosure Agreement (NDA)?

What is Non-Disclosure Agreement (NDA)-companysuggestion


A Non-Disclosure Agreement (NDA) is a legal contract that express certain information to be confidential and the extent to which its disclosure is confined to third parties. That’s why you need a Non-Disclosure Agreement (NDA). This agreement can be created with a person or an organisation.

The agreement which help to keep all the significant decision, details and other authorisation of the company confidential is known as Non-Disclosure Agreement(NDA). Confidential information includes business plans, strategies, business methods, business secrets, charts and so on.

If the parties enter into an agreement it will bind all the parties. After that parties cannot disclose all the matters that have been mentioned in this agreement. The parties of this agreement signing and agree that confidential information they may obtain will not be share to any other people. This NDA may also be known as confidentiality agreement.

Inclusion under Non-Disclosure Agreement

The key elements of Non-Disclosure Agreement are:

  • ·      Parties

The names, address and other significant details of the partiesshould be mentioned in this part of agreement.

  • Terms of an agreement

The non-disclosure agreementformat must mention date of execution and the duration of existence of agreement. It should also mention if the rules and regulations related to disclosure of details will be applicable after the expiry of non-disclosure agreement or not.

  • Confidential Information

The non-disclosure agreement format must mention what information is to be kept in ‘confidential’ category or to be protected.

  • Disclosure of Confidentiality

This part of Non- Disclosure Agreement express the intentions for which confidential information will be used. It will also mention with whom such information can be shared.

  • Dispute Resolution

This agreement must indicate the remedial actions to resolve the disputes. It will include various forms of dispute resolution they may find to employ such as arbitration.

Types of Non- Disclosure Agreement (NDA)

These are the types of Non- Disclosure Agreement:

  1. Unilateral Agreement:

Unilateral Agreement is also known as One-way agreement. It means that only one party has shared confidential information to the other party. It is the most common type of NDA. The one party who disclose the information is called disclosing party and other party is named as receiving party.

  • Bilateral Agreement:

Bilateral Agreement is also known as Two- way agreement. It means that both party should disclose the confidential information to each other. Both parties can limit how much information to be shared to others.

  • Multilateral Agreement:

Multilateral Agreement involves three or more parties in which one of them disclose confidential information to others and other party promise to secure such information from further disclosures.

Benefits of Non- Disclosure Agreement

The following benefits of Non- Disclosure Agreement are:

  • Protect business information:

The Non- Disclosure Agreement is the best way to protect or secure confidential information. When two parties enter into an agreement, all the significant information mentioned in the agreement shall be secure and if any information gets leaked to the public will be known as a breach of the agreement.

  • Maintained privacy:

The best advantage of Non-Disclosure Agreement is maintain privacy. It means that this agreement gives guarantee of privacy. It maintain the privacy of an individual or any legal entity. If the parties enter into a Non-Disclosure Agreement (NDA), they can do work without the fear of disclosing confidential information.

  • The party can be sued in case of leaked information:

If the information gets leaked to the public or to the third party that have been mentioned in the Non-Disclosure Agreement, the disclosing party can sue the receiving party.

  • Enhances Client Relationships:

Non-Disclosure Agreement increases the client relationships. It means that the businesses that work on third-party project require their employees to sign NDAs that restrict the disclosure of confidential information and promise to the clients that data is safe.


At last, we can say that the Non- Disclosure Agreement is very useful agreement to protect confidential information from the others and also helps at the time of sharing confidential information with the other party in secured way. If you have any query about it, you can contact to the company suggestion.

CS Seema Bansal

CS Seema Bansal having experience of two years under CS firm and also having degree of B. Com and M. Com. Having expert knowledge of ROC related work and other company related compliances with MCA.

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