When Do You Need an NDA?
An NDA is one of the most common — and most overused — legal documents. Here's how to know when you actually need one.
Need a NDA agreement?
Start your NDA agreementWhat an NDA actually does
A non-disclosure agreement (NDA) is a contract where one or both parties agree to keep certain information confidential. It is most useful before sharing something sensitive — a pitch deck, source code, financial numbers, or a customer list — with someone outside your company.
What it does not do: stop someone from competing with you, replace a real employment contract, or magically protect ideas that are already public.
Five situations where an NDA is worth signing
1. Pitching investors who you do not yet have a relationship with. (Note: most VCs will not sign one.)
2. Hiring a freelancer or contractor who will see private business systems.
3. Exploring a partnership, acquisition, or licensing deal.
4. Sharing prototypes, code, or designs for evaluation.
5. Letting a third party audit your books or operations.
When an NDA is overkill
If the information is already public, you do not need an NDA. If you are hiring an employee, use an employment agreement with a confidentiality clause instead. If you are signing a master services agreement, the confidentiality terms are usually built in.
Templates mentioned in this article
This article is a planning aid, not legal advice. For complex situations, consult a licensed attorney in your jurisdiction.