A confidentiality agreement, also known as a non-disclosure agreement or NDA, is a contract between at least two parties that limits the disclosure of confidential material, knowledge, or information. The purpose of this restriction is to allow disclosure of non-public information between the parties.
For a startup business or an existing business with a new idea or business plan, a confidentiality agreement is vital. Without this contract, any information revealed could then be disclosed to a third party or potential competitor.
While it is important to trust the people you work with in development, without this agreement in place you are at risk for losing any advantage you may have against competing companies. There is no risk in requiring a non-disclosure agreement (sometimes referred to as an NDA). Without an NDA, the risk of disclosure is much greater and your potential claims against the disclosing party are limited.
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