What is a 'non-disclosure agreement' commonly used for?

A 'non-disclosure agreement' (NDA) is primarily used to establish confidentiality obligations between parties concerning information that is shared during the course of their relationship. Its main function is to protect sensitive information from being disclosed to unauthorized individuals or entities. This legal document ensures that the information shared remains private and that both parties understand the importance of safeguarding proprietary or confidential data.

In the context of a non-disclosure agreement, one party agrees not to disclose specific information to third parties or to use that information for any purpose other than the one specified in the agreement. This is particularly pertinent in business environments where companies may need to share trade secrets, intellectual property, or sensitive business strategies with potential partners, employees, or vendors.

While other agreements might address payment terms, scope of work, or dispute resolution, these elements are not the primary purpose of an NDA, as their focus is strictly on maintaining confidentiality.