What Is an NDA and Why Your Business Needs One

In business, trust is important—but so is protection. Whether you’re sharing your business idea with a potential partner, onboarding a contractor, or working with a new vendor, you want to make sure your confidential information stays private.

That’s where a Non-Disclosure Agreement (NDA) comes in.

As a business law attorney, I regularly help entrepreneurs and companies use NDAs to safeguard their ideas, data, and trade secrets. Let’s break down what an NDA is, when you need one, and how it works.

📌 What Is an NDA?

A Non-Disclosure Agreement (NDA) is a legally binding contract that prevents one party from sharing certain confidential information with others.

It’s a powerful tool that:

• Creates a legal obligation to keep sensitive information private

• Outlines exactly what must be kept confidential

• Specifies how long the obligation lasts

• Gives you legal recourse if someone violates the agreement

🧠 What Does an NDA Protect?

An NDA can protect any type of confidential or proprietary business information, including:

• Business ideas or strategies

• Financial records

• Client or customer lists

• Product designs or prototypes

• Trade secrets

• Marketing plans

• Internal processes and operations

• Software or technology under development

Basically, anything that gives your business a competitive edge or involves sensitive internal knowledge can be covered by an NDA.

🔐 When Should You Use an NDA?

You should use an NDA any time you are disclosing sensitive information to someone who isn’t already legally bound to keep it confidential. Common scenarios include:

• Hiring contractors or freelancers

• Discussing business partnerships or potential joint ventures

• Pitching your idea to potential investors

• Hiring employees, especially in leadership or technical roles

• Working with vendors, designers, developers, or consultants

• Mergers, acquisitions, or licensing deals

If you’re saying, “I probably don’t need one”—chances are, you do.

🤝 Types of NDAs

There are generally two types of NDAs:

1. Unilateral NDA – Only one party is sharing confidential information (common with employees, contractors, or vendors).

2. Mutual NDA – Both parties are sharing sensitive information and agree not to disclose it (common in partnerships or joint ventures).

As your attorney, I determine which type of NDA fits your situation and customize it to reflect your specific business needs.

⚠️ What Happens If Someone Breaks an NDA?

If someone violates an NDA:

• You may be entitled to monetary damages

• You can seek a court order to stop further disclosure

• You may pursue injunctive relief to prevent damage to your business

But only if your NDA is valid, enforceable, and properly written.

Online templates can be risky—if the language is too vague or not enforceable in your state, you may have little to no protection.

📝 What Should Be in an NDA?

A strong NDA should include:

• Clear definitions of what is considered confidential

• Who is bound by the agreement

• How the information can (and can’t) be used

• How long the confidentiality obligation lasts

• What happens in the event of a breach

• Any exclusions (e.g., information that’s already public)

As your business law attorney, I ensure your NDA is properly drafted, enforceable, and tailored to your unique business relationships.

✅ Final Thoughts: Protect First, Share Second

Your ideas, systems, and strategies are the backbone of your business. Don’t take chances with your intellectual property or confidential information.

Before you share sensitive information with anyone—protect it with a legally sound NDA.

👉 Need an NDA drafted or reviewed? I can help. Book a consultation and let’s make sure your business stays protected every step of the way.