Non-disclosure agreement
An agreement not to share specified information — routine between working parties, and near-useless as a way to protect an idea.
A non-disclosure agreement is a promise not to share defined information with defined people for a defined period. In its ordinary use it is unremarkable and sensible: a client's customer data, a supplier's pricing, a set of figures shared during a sale.
The misuse worth naming is asking someone to sign one before hearing an idea. Ideas are rarely the scarce input, execution is, and the request signals inexperience to the exact people whose time you were trying to get — most investors and many senior operators decline as policy, because they see adjacent ideas constantly and cannot take on that exposure. You will lose more from the meetings that do not happen than from the disclosure that almost certainly would not have hurt you.
Where one genuinely belongs, the details do the work: what is actually confidential rather than "all information", how long the obligation lasts, and what the receiving party is allowed to do with what they already knew. A mutual version is normal between two working businesses and is usually faster to agree than a one-sided one.
Scope, duration and enforceability vary by jurisdiction, and an agreement that is standard in one country can be unenforceable in another. Have the one you use checked by a qualified professional where you operate.
Also known as
- NDA
- confidentiality agreement
Relevant for
- Founders
- Asking someone to sign before you describe an idea costs you the meeting and protects almost nothing — the scarce input was never the idea.
- Business owners
- Use one for client data and figures, where it is routine; define what is actually confidential, because "all information" is the version that gets argued about.