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Non-disclosure agreement (NDA)

A non-disclosure agreement (NDA) is a legal contract between two parties that restricts the sharing of sensitive information exchanged during a business relationship. NDAs are typically mutual, binding both parties to confidentiality, and are often embedded within broader master service agreements.

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About this video

A non-disclosure agreement (NDA) is a legally binding contract signed by two parties who agree to protect sensitive information shared during the course of a business relationship. When organizations collaborate, they frequently exchange confidential data that, if disclosed to outside parties, could cause significant harm. An NDA establishes the legal parameters that govern this exchange, defining what information is protected and restricting both parties from sharing it beyond the partnership. Most NDAs are mutual, meaning both parties accept identical confidentiality obligations upon signing. This bilateral structure reflects the reality that sensitive information often flows in both directions during a business engagement. The threshold for when an NDA should be executed is straightforward: before any sensitive business information is disclosed. For ongoing business relationships, having a standing NDA in place provides legal protection even in cases where sensitive information is shared unintentionally. NDAs can range from brief, straightforward documents to lengthy, detailed agreements depending on the complexity of the relationship and the nature of the information involved. They do not always exist as standalone contracts. In many professional contexts, confidentiality provisions are folded directly into a master service agreement, consolidating legal protections under a single governing document.

What you'll learn

What's covered

Non-Disclosure Agreements

Aligned to

ISC2 CISSP
1.4 Understand legal, regulatory, and compliance issues that pertain to information security in a holistic context
CompTIA Security+
5.1 Summarize elements of effective security governance.
NIST 800-53
PS-6 Access Agreements
NIST CSF
GV.OC-03 Legal, regulatory, and contractual requirements regarding cybersecurity — including privacy and civil liberties obligations — are understood and managed.

Key terms

Non-disclosure Agreement
NDA
A Non-disclosure Agreement is a legally binding contract that prohibits parties from sharing confidential information obtained during a business relationship, commonly required before sharing sensitive security findings or proprietary data.
Confidentiality
The principle that information is accessible only to those authorized to access it.

Topics

Non Disclosure Agreement Legal Contracts Confidentiality Information Security Business Law Master Service Agreement

Transcript

A non-disclosure agreement, or an NDA, is what two parties sign where they agree that they're not going to disclose anything about the partnership or information that's being exchanged.

When two entities are doing business together, it's quite possible that they're going to be sharing sensitive information with each other, sensitive information that could damage the other company. So what an NDA, or non-disclosure agreement, does is set up a legal parameter for that: whatever is discussed, whatever is covered, and whatever sensitive information is gone over, you're not going to share that with other entities beyond that partnership.

Non-disclosure agreements usually are two-way streets. That is, when both parties sign it, they're both agreeing that they're not going to share sensitive information that they learn to outside parties.

Who should sign an NDA

So who should sign these NDAs? Really, before you disclose any sensitive business information, you should get an NDA signed first. And if you have any ongoing relationship with another business entity, just get one signed, because probably at some point in time, whether by accident or on purpose, you're going to share some sensitive information, and that way you're legally covered with this NDA.

Here's an example of an NDA by the Department of Revenue for the state of Washington. It's pretty simplistic, so it doesn't need to be real complicated, although I can tell you that a lot of the ones that I've signed have been quite a bit longer and more extensive than this.

Many times you don't necessarily need to have a separate NDA that you sign. Many times this is incorporated into a master service agreement.

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