Legal Contract between Two Parties That Outlines Confidential Material

A legal contract between two parties that outlines confidential material is an important document that protects both parties and ensures that sensitive information stays safe. This type of agreement is also known as a Non-Disclosure Agreement (NDA) or a Confidentiality Agreement.

What is a Non-Disclosure Agreement?

A Non-Disclosure Agreement (NDA) is a legal agreement between two parties that outlines the confidentiality of information shared between them. An NDA ensures that confidential information remains confidential and cannot be shared with anyone else without the express permission of the parties involved. This type of agreement is commonly used in business and commercial relationships, where both parties want to protect their sensitive information from being disclosed to the public or third parties.

Why Do You Need an NDA?

An NDA is important for a number of reasons. Firstly, it prevents the recipient from sharing sensitive information with anyone else. Secondly, it protects the disclosing party from any damage that might arise from the disclosure of confidential information. Thirdly, it lays out the terms of the agreement in a clear and concise manner, ensuring that both parties understand their respective roles and responsibilities.

What Should an NDA Include?

An NDA should include the following elements:

1. Definition of Confidential Information: The agreement should clearly define what information is considered confidential. This could be anything from trade secrets, formulas, designs, and technical data to customer lists and financial information.

2. Parties Involved: The NDA should clearly state the parties involved and their roles in the agreement.

3. Purpose: The purpose of the agreement should be clearly stated, including the reason why the agreement is necessary and the nature of the confidential information.

4. Obligations of Recipient: The recipient of the confidential information should be bound by certain obligations, including not disclosing the information to anyone else and taking reasonable measures to protect the information.

5. Exclusions: The agreement should include any exclusions to the confidentiality obligation of the recipient, such as information that is already in the public domain or that the recipient developed independently of the disclosing party.

6. Term and Termination: The agreement should state the duration of the confidentiality obligation and the circumstances under which the agreement can be terminated.


An NDA is an essential legal document for businesses and companies that want to protect their sensitive information. When drafting an NDA, it is important to ensure that all parties involved understand the terms and obligations of the agreement. To ensure the agreement is legally binding, it is recommended to seek the assistance of a legal professional. With an NDA in place, both parties can conduct business with the peace of mind that their confidential information is protected.