Non Disclosure Agreement
A non-disclosure agreement or more commonly known as a NDA. An NDA is a legal contract between (at least) two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to or by third parties. NDAs are commonly signed when two companies, individuals, or other entities (such as partnerships, societies, etc.) are considering doing business and need to understand the processes used in each other’s business for the purpose of evaluating the potential business relationship. NDAs can be “mutual”, meaning both parties are restricted in their use of the materials provided, or they can restrict the use of material by a single party.
Basically it protects your idea from being highjacked by someone else and is important if you are at the formative stages of your idea and you have yet to apply for Trademarks and Patents. Beware of a company that is not willing to sign an NDA!
Note – sometimes an NDA can also be known as a proprietary information agreement (PIA) or secrecy agreement (SA), confidentiality agreement (CA), or a confidential disclosure agreement (CDA).