A confidentiality agreement, often referred to as a non-disclosure agreement (NDA), is a legally binding contract that establishes a confidential relationship between parties. The purpose of this agreement is to protect sensitive information from being disclosed to unauthorized individuals or entities.

Characteristics
– Legally Binding: The agreement is enforceable by law, meaning that if one party breaches the terms, the other party can seek legal remedies.
– Defined Scope: It specifies what information is considered confidential, which can include trade secrets, business plans, financial data, and client lists.
– Duration: The agreement typically outlines how long the information must remain confidential, which can vary from a few years to indefinitely.
– Permitted Disclosures: It may include clauses that allow for certain disclosures, such as to employees or contractors who need to know the information for business purposes.

Examples
– A business owner may require potential buyers to sign a confidentiality agreement before sharing sensitive financial information during the sale process.
– A startup might ask investors to sign an NDA before discussing proprietary technology or business strategies.
– A company may use a confidentiality agreement when hiring a consultant to ensure that any sensitive information shared during the project remains protected.