What is a non-disclosure agreement (NDA)?

A non-disclosure agreement (NDA) is primarily a legal contract that serves to prevent the sharing or disclosure of confidential information between parties. It plays a crucial role in protecting sensitive business information, trade secrets, or proprietary data that one party wishes to share with another while ensuring that such information remains confidential. By establishing clear legal obligations, an NDA provides assurance to the disclosing party that their sensitive information will not be disclosed to unauthorized individuals or entities, helping to maintain a competitive edge and fostering trust in business relationships.

The other options describe different types of contracts or agreements that do not encapsulate the essence of an NDA. For example, allowing the sharing of confidential information contradicts the fundamental purpose of an NDA. Meanwhile, contracts focused on project timelines or payment schedules pertain to project management and financial aspects rather than confidentiality agreements, making them unrelated to the definition of an NDA.