There are situations in business transactions when a party needs to share its confidential information to another party for some collaborative work or to find out the possibility of future product developments or as a part of a joint venture or for any other. The parties who receive the confidential information might be:

• 1. Consultants
• 2. Vendors
• 3. Employees
• 4. Investors
• 5. Clients
• 6. Financial advisors

Confidential information is something that is generally very sensitive information which is not available in the public domain. It might be very important or a trade secret for respective person or business. An owner of the confidential information may have an apprehension about the secrecy of the confidential information. There is a need of some obligation on the receiver of the confidential information to keep it limited to that party and not to disclose to any third party unless consented by the owner of the confidential information. Parties in such situation should enter into a Confidentiality and non-disclosure agreement or Non Disclosure Agreement (NDA), before disclosing such information to the other party.

The party who is owner of the confidential information is termed as disclosing party of discloser. The party who gets to know the confidentiality information is termed as receiving party. Such agreements take care of the interests of the disclosing party. The NDA defines what is confidential information and what is not confidential information. It defines the term for which the agreement will be in force. It may take care of issues like damages and indemnification in case of breach of the NDA. It is very important to note that the NDA must have clearly discussed the jurisdiction, governing laws and exceptions to the covenants.