Function

• Many people refer to the NDA confidentiality agreement simply as NDA or confidentiality agreement. This document provides protection for individuals or companies that must unveil vital information to a third party that must remain confidential. The information may include details about the organization's methods, strategies, procedures, or new products and services. The document may cover anything you do not want the other party to discuss or reveal to anyone.
  
  

Types

• This agreement has flexibility and may cover a variety of circumstances. Some common uses of NDA's include potential investors, manufacturers, distributors or retail stores. Potential customers and advertising companies usually sign confidentiality agreements to safeguard business secrets. The kind of information typically disclosed, and business owners seek to protect, vary depending on the business entity. Some examples include suppliers, customer lists, business partners, financial information and secret in-house business methods.
  
  

Features

• Generally, NDA confidentiality agreements contain names of parties and the date of the contract. The document should also list specific clauses outlining the confidential information the receiving individual has an obligation not to reveal to others. A wide variety of item may fall under the heading of "confidential information," such as a secret client list, internal procedures or the financial statement of the company.
  
  It may also cover exceptions to the agreement, such as information publicly available to others. The NDA may also list the legalities of breaching the agreement and possible remedies. The parties can add other provisions to the confidentiality agreement as deemed necessary.
  
  

Time Frames

• The NDA confidentiality contract may include a clause clarifying the duration the information must remain secret. Many contracts contain the following language or something similar: "the individual receiving the client list may not use or share the information for three years." Either party can negotiate the period for NDA contracts. According to the Service Corps of Retired Executives (SCORE), the average period in the United States runs five years, but many companies try to limit the duration to 24 to 36 months.
  
  

Expert Insight

• Business lawyer JW Dicks, who appears regularly on television and cable news programs and also a best-selling business law author, cautions against signing NDA agreements without understanding the full ramifications of the contract. He emphasizes that many confidentiality agreement may contain enforceable non-compete provisions within the contract. Dicks advises you to put restrictions on the geographic area and the time frame if you sign an NDA a contract with a non-compete clause.