What does a non-disclosure agreement (NDA) primarily protect?

A non-disclosure agreement (NDA) primarily protects confidential information shared between parties. When two or more parties enter into an NDA, they are agreeing to keep specific information confidential and not disclose it to outside parties. This is particularly crucial in business settings where companies share sensitive information—such as trade secrets, proprietary technologies, or client lists—during negotiations or collaborations.

The NDA serves to establish a legal framework that ensures that the sharing party can trust the receiving party to maintain the confidentiality of the information. If the receiving party breaches this agreement, the disclosing party has legal recourse to seek damages or enforce the terms of the NDA.

Publicly available information is not protected by an NDA since the essence of an NDA is to safeguard information that is not accessible to the general public. Individuals' personal opinions are typically not covered by NDAs unless they pertain to business-related comments that may disclose sensitive information. Financial transactions, while they can involve confidential aspects, are usually addressed through separate agreements that focus on the terms of the transaction rather than confidentiality per se. Thus, the NDA's main function remains focused on the protection of confidential information exchanged between the parties involved.