NDA (Non-Disclosure Agreement), also known as a confidentiality agreement is a legal contract between two or more parties to protect confidential information shared between them. It states what kind of information is considered confidential as well as the terms and conditions on how the information can be shared, used or disclosed. 

NDAs are commonly used in various situations, like:

• When companies bring on fresh employees who need access to sensitive information.
• During business negotiations or partnerships where both parties need to share confidential details.
• When startups or inventors pitch their ideas to potential investors or partners.

Information covered by an NDA:

The following are some examples of information that can be protected by NDA:

• Business plans and strategies
• Financial information
• Product designs
• Customer data
• Trade secrets 
• Inventions

Types of NDA:

Generally, there are  2 types of Confidentiality agreements:

• Unilateral NDAs: Here, only one party will disclose the confidential information to the other. For example, companies sharing information with new employees.
• Mutual NDAs: In mutual NDAs, there will be a mutual exchange of information between the parties. Both of them agree to protect the information they receive from the other party. For example, if two companies are planning to start a joint venture, then they will share the technology or trade secrets that they use with each other.

Key Elements of an NDA:

Most of the NDAs contains the following sections:

• Identification of Parties: This section contains the list of all the people and/or entities involved in the non-disclosure agreement.
• Confidential Information: This states what information is protected by the NDA.
• Time frame: It specifies the duration of the confidentiality agreement. 
• Purpose of disclosure: NDA states situations or circumstances where the confidential information can be shared.
• Remedies of breach: This section states the action that will taken against the breach of contract. It can be legal actions as well as financial penalties.

Even though NDAs may seem like a formality, they have a huge legal impact. By creating a contractual obligation, NDAs create an environment of trust that allows parties to exchange valuable information without fear of it being misused or leaked.