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disclosure agreement (NDA), also sometimes referred to as a confidential disclosure agreement (CDA) or a proprietary information agreement (PIA), is a legal contract between at least two parties which outlines confidential materials or knowledge.
Unilateral NDAs are used when only one party is disclosing information such as an employer, a startup or a company to an employee, investor or consultant respectively. On the other hand, a mutual NDA is used when both parties are disclosing confidential information.
Types of NDAs Generally speaking, non-disclosure agreements fall into two main categories: unilateral and mutual (there's also the multilateral type, but those aren't as common).
Whereas NDAs are often used in business and legal settings to protect trade secrets, client lists, and financial data, confidentiality agreements are typically devised in employment or personal situations to protect sensitive information.
Typically, a legal professional writing the NDA will complete these steps: Step 1 - Describe the scope. Which information is considered confidential? ... Step 2 - Detail party obligations. ... Step 3 - Note potential exclusions. ... Step 4 - Set the term. ... Step 5 - Spell out consequences.
Detailed five essential elements that every confidentiality agreement should include. 1) What information is considered confidential? ... 2) Exceptions to confidentiality. ... 3) Obligations/Requirements of signees. ... 4) Consequences of breaking the confidentiality agreement. ... 5) Length of the agreement.
There are three types of NDAs: unilateral, bilateral, and multilateral. Read on to learn when you should use each type.
Definition: An NDA allows a party to communicate nonpublic information to another. A CDA allows multiple parties to handle information with utmost secrecy.