Whether you’re launching a startup, collaborating on a creative project, or entering a new business partnership, protecting your confidential information is critical. One of the most powerful legal tools for doing that is a Non-Disclosure Agreement (NDA).
But what exactly can an NDA protect? And when is it smart—or absolutely necessary—to use one?
What Is an NDA?
A Non-Disclosure Agreement is a legally binding contract where one or both parties agree not to disclose certain information shared during a business relationship. NDAs are commonly used to protect sensitive information, prevent leaks, and establish trust between parties.
What an NDA Can Protect
NDAs can cover a wide range of confidential or proprietary information, including:
- Business Plans and Strategies
If you’re pitching your business idea to investors or partners, an NDA can prevent them from taking your concept and using it without you. - Trade Secrets and Processes
Recipes, manufacturing methods, proprietary algorithms, or internal workflows that give your business a competitive edge can all be protected under an NDA. - Client Lists and Relationships
Service providers often use NDAs to ensure that contractors or freelancers don’t poach clients or reveal sensitive client data. - Marketing Plans and Product Launches
If you’re preparing a new product, your pre-launch strategy, designs, and pricing can all be protected through an NDA. - Financial Information and Projections
NDAs are often used in mergers, acquisitions, and investor meetings to safeguard financial documents. - Creative Concepts and Intellectual Property
Artists, designers, and developers can use NDAs when discussing work with potential collaborators or clients before a copyright or trademark is secured.
When You Should Use an NDA
You don’t need an NDA for every conversation—but here are key situations where one is strongly recommended:
1. Before Sharing a Business Idea
If you’re seeking investors, partners, or collaborators and want to pitch your startup or concept, an NDA helps you retain control over your idea.
2. When Hiring Freelancers or Contractors
Anyone working with your brand’s confidential data (like marketing agencies, developers, or consultants) should sign an NDA to ensure privacy.
3. Before Negotiating a Deal
When discussing the potential purchase or sale of a business, product, or service, use an NDA to prevent sensitive information from being leaked or misused.
4. In Joint Ventures and Partnerships
Collaborating with another business or individual? An NDA can make sure both sides keep each other’s proprietary info confidential.
5. During Product Development
If you’re working with manufacturers, designers, or developers to create something new, use an NDA to avoid unauthorized disclosure or imitation.
What an NDA Can’t Do
It’s important to know that an NDA cannot retroactively protect information you’ve already disclosed without an agreement in place. And NDAs can’t stop someone from using general knowledge or skills they already had before the relationship began.
Also, NDAs must be reasonable in scope and duration—if they’re overly broad or vague, they may not be enforceable in court.
Protecting Your Business with an NDA
An NDA doesn’t replace other legal protections like copyrights, trademarks, or patents—but it adds an extra layer of protection, especially in the early stages of collaboration or negotiation.
Pro tip: Make sure your NDA is tailored to your specific situation. Generic templates may leave out key provisions or include terms that don’t hold up legally in your state.
Need Help Drafting an NDA?
If you’re sharing confidential information in any professional setting, it’s smart to put an NDA in place before the conversation starts. Our firm can help you draft or review a customized NDA that protects your ideas, your business, and your peace of mind.
Call us at 888-914-0011, email us at contact@landrypllc.com, or schedule a consultation here to get started.
