A non-disclosure agreement is a legal contract in which all involved parties promise to protect the confidentiality of secret information that is disclosed during employment or another type of business transaction. An NDA creates a confidential relationship between the parties to protect any type of confidential and proprietary information or a trade secret.

Confidential information could be a sales plan, a list of customers, a manufacturing process or a formula for a soft drink. A nondisclosure agreement ensures that secrets stay secret, or at least have the possibility of legal action if they are misused or disclosed to the wrong parties.