Let’s talk about one of the most common (and often misunderstood) legal tools in business: the Non-Disclosure Agreement, or NDA. At its core, an NDA is a simple agreement—sometimes just one or two pages—that creates a legal obligation to keep certain information confidential. It’s often the first step when you’re starting a conversation about a potential business relationship but haven’t yet signed a more formal contract.

So, when do you use an NDA? Think about a scenario where you have an idea, and you’re meeting with a software agency to explore building it. You might feel hesitant to share the details because, well, what if they run off with your idea? An NDA helps prevent that by legally binding the agency to keep your conversations confidential. On the flip side, if you’re the service provider—say, a graphic designer or a marketing consultant—you might receive proprietary details about your client’s product, strategy, or launch plans. An NDA ensures you’re legally bound not to share or misuse that information.

So, use an NDA before you’ve signed a formal agreement with someone and confidential information is being shared. This could be with a potential client, a vendor, a collaborator, or even a freelance contractor you’re thinking about bringing onto your team.

NDAs are essentially the green light to start having open, productive conversations without fear that your ideas or information will end up where they shouldn’t. In future posts, we’ll dive deeper into what exactly NDAs protect and what to look out for before you sign one.

Create a custom NDA using Counsel Club's contract tools.