what is nda

What is a NDA? Everything you need to know about NDA's

By Maddy GlynnDigital Marketing Specialist
Published on January 28, 2020


Did you know that more than one-third of the US workforce is bound to their company by a non-disclosure agreement (NDA), also known as a confidentiality agreement (CA)?

In this post, you’re going to learn what an NDA is and how businesses across all industries can use them to protect confidential information.

You’ll also get a chance to see how you can easily simplify the traditional NDA workflow saving both time and money.

Let’s dive right in...

Why care about non-disclosure agreements?

Using non-disclosure agreements can protect certain important aspects of your business. By that, I mean the benefits go further than visitors or employees simply not disclosing information.

A non-disclosure agreement allows you to:

  • Protect trade secrets and other confidential information
  • Ensure employees keep silent about sensitive information like proprietary algorithms or corporate culture
  • Protect business secrets, design specs, or upcoming product launches from your competition
  • Seek legal recourse if the NDA is breached, and you may even be able to sue for damages

And yes, increased security and privacy. Which, if you’re in the business world, you’re undoubtedly interested in.

What is a non-disclosure agreement, exactly? It’s both simple and complex simultaneously. While there are many definitions out there, few are simple and concise.

What's an NDA? Here’s A Simple Answer

A NDA is a legally binding contract that creates a confidential relationship.

For example, if your company decides to hire outside consultants, you may have them all sign an NDA to protect your company’s confidential information such as trade secrets, client lists, and business practices.

A non-disclosure agreement can be classified as unilateral, bilateral, or multilateral.

  1. Unilateral -- A unilateral NDA - sometimes referred to as a one-way NDA - involves two parties where only one party expects to disclose certain information to the other party and wants that information protected from further disclosure.
  2. Bilateral - A bilateral NDA - sometimes referred to as a mutual NDA or a two-way NDA - involves two parties where both parties expect to disclose information to one another and want that information protected from further disclosure. Mutual NDAs are common when businesses enter into a joint venture or merger.
  3. Multilateral - A multilateral NDA involves three or more parties where at least one of the parties expects to disclose information to the other parties and wants that information protected from further disclosure.

The earliest uses of NDAs began in the 1940s in the context of maritime law.

Later, the agreements became popular with technology industry firms looking to protect trade secrets, new products, and proprietary algorithms.

By the 1980s, the concept of non-disclosure began to enter contracts of all kinds. NDAs became especially popular in employment contracts for white-collar jobs. And perhaps more importantly, NDAs became a regular feature of legal settlement agreements.

Worth noting: Although this blog is for informational purposes and we can’t offer legal advice, some of the typical elements of a non-disclosure agreement include:

  • The names of the parties to the agreement
  • A definition of what constitutes confidential information in this case
  • Any exclusions from confidentiality
  • A statement of the appropriate uses of the information to be revealed
  • The time periods involved
  • Miscellaneous provisions such as laws that apply to the agreement and which party pays attorney fees in the case of a dispute

NDAs may be tailored to any situation but there are six major elements that are considered essential.

What are the business advantages of putting an NDA in place?

Although the use of NDAs used to be restricted to tech firms, nowadays businesses in all industries use non-disclosure agreements to protect sensitive information.

For example, a journalist attending and event at the Cadillac Live studio location were asked to sign an NDA to keep him from revealing the address of the facility and ensure the safety of employees.

In some cases, an NDA is part of an employment contract while in others it may be part of a settlement agreement.

Because non-disclosure agreements are legally enforceable contracts, there are legal consequences to breaking an NDA. In most cases, the consequence takes the form of monetary penalties.

In practice, when somebody breaks a non-disclosure agreement, they face the threat of being sued and could be required to pay financial damages and related costs.

2 resources to help you get started with NDA's

It can be a challenge to handle all the details associated with using NDAs to protect your work environment. For example, you should have systems in place to store and monitor the NDA. This will allow you to know about any breaches as soon as possible, or notify you if the NDA expires along with any protection you may be relying on.

That’s why we’re sharing two resources you may not have known about that can help you get started.

The IP Australia contract generator

IP Australia -- an agency of the Department of Industry, Innovation, and Science that administers intellectual property (IP) rights -- has developed the IP Contract Generator tool that allows you to create your own NDA.
You can use it to create one way or mutual NDAs. Simply fill in the required fields and the system will generate your NDA in an MS Word document. Keep in mind the contract is a general template based on Australian law and you should ask an independent legal advisor to review the NDA before it is signed.


Not only does Sine deliver a real-time view into what's happening in terms of visitor management, but Sine has a suite of features that deliver the ability to generate, distribute, and receive non-disclosure agreements. You can even digitize them for extra security and require people to fill them out prior to being able to check into a site or office.

When you use Sine to handle your non-disclosure agreements they are:

  • securely stored on the Sine dashboard
  • copied and sent to your signee and your business
  • sent to parties based on their location.

In fact, by using geofencing, you can instantly share NDAs with relevant parties the moment they arrive on-premises. That means no more meetings to sign documents since the Sine app can do it for you.

Making use of Sine’s diverse, location-based services you’re able to effectively send and receive signed NDAs as well as have all of the documentation provided to parties your business’s entry point, effectively automating the entire NDA-signing procedure.

With features like that it’s quite possible to enjoy all of the benefits of using NDAs without drowning in documents or pushing paper.

Now you know what nondisclosure agreements are and how they can be used in a variety of situations.