What does a Non-Disclosure Agreement (NDA) ensure between parties?

A Non-Disclosure Agreement (NDA) is a legally binding contract that establishes a confidential relationship between parties. The primary purpose of an NDA is to protect sensitive information from being disclosed to third parties. By signing an NDA, the parties agree not to share or disclose any proprietary information or trade secrets with others, ensuring that the information remains confidential.

The importance of confidentiality in an NDA cannot be overstated, as it helps businesses and individuals safeguard their intellectual property, maintain competitive advantages, and build trust in professional relationships. NDAs are commonly used in various contexts, such as when employees join an organization, when companies enter into business negotiations, or when independent contractors are hired for specific projects.

In contrast, the other options do not accurately represent the primary function of an NDA. While data sharing may occur in certain contexts, it is not the essence of an NDA; rather, it often limits the sharing of sensitive information. Revenue sharing and joint ventures pertain to business arrangements and financial agreements, which are separate from the confidentiality focus of an NDA.