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Non-disclosure agreement (NDA)

What is a non-disclosure agreement (NDA)?

A non-disclosure agreement (NDA) is a legal contract that requires parties to keep certain information confidential. When an employee, partner, or contractor signs an NDA, they agree not to share sensitive information that could harm the company.

For example, if a company is developing a new product and shares blueprints, business strategies, or internal documents with an employee or contractor, an NDA ensures that this information stays protected and isn’t disclosed to competitors or third parties.

NDAs typically cover various types of confidential information, including:

  • business plans and strategies,
  • proprietary technologies and product developments,
  • customer data, contracts, and financial records,
  • unique processes or work methodologies.

Violating an NDA can lead to legal consequences, including fines or lawsuits. Companies use these agreements to safeguard their business interests and intellectual property.

Signing an NDA is a common practice when hiring employees, forming partnerships, or starting joint projects. It helps create a secure and trustworthy working relationship for all parties involved.

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