A Non-Disclosure Agreement, also generally called as ‘Confidentiality Agreement’, is an agreement wherein the parties agree to share the confidential information/data which is specified in the ‘Confidentiality Clause’ of the Non-Disclosure Agreement. The parties to the Non-Disclosure Agreement also agree not to disclose such information to the third party beyond the terms of the agreement.
Other Names of the Non-Disclosure Agreement
A Non-Disclosure Agreement has multiple names like:
- Confidential Agreement (CA)
- Confidential Disclosure Agreement (CDA)
- Secrecy Agreement (SA)
- Proprietary Information Agreement (PIA)
These days, be it a Startup or others, the major assets of any corporate body is its Intellectual Property. A Non Disclosure Agreement helps protecting the Intellectual Property Rights of the parties including its databases, client lists, proprietary information, sensitive business-related information, etc.
Following are some major benefits of entering into an NDA -
- A Confidential Clause in the Non Disclosure Agreement clearly defines what exactly is the ‘confidential matter’ for which the Non Disclosure Agreement is entered into.
- It helps in maintaining the utmost secrecy between the parties by binding them legally through various clauses constituted under the Non Disclosure agreement. This prohibits the receiving party from disclosing the confidential information.
- Various clauses of the Non-Disclosure Agreement also draw the timeline upto which the party is obliged to maintain the secrecy. This period could be beyond the effective period of the NDA itself.
- A Non Disclosure Agreement is legally binding and thus the party infringing the agreement would be legally liable to compensate the damages to the aggrieved party (which is mostly the disclosing party).
- The dispute can be referred to the Arbitrator or even taken to the court if the level of violation demands. That’s how the owners of the confidential information is granted relief as they have taken effort to safeguard the shared confidential information through the Non Disclosure Agreement.