00:08
Adam Stofsky
So, continuing our quick definitions of contract concepts, David, what is an NDA? That's one we hear about a lot.
00:17
David Tollen
NDA stands for Non Disclosure Agreement, and it's one of the most common types of contracts. It's a contract that says essentially, if I give you a document or some other information that is very sensitive, we can set up a mechanism where we agree this is confidential. Like, I stamp it confidential and you're promising as the recipient you won't share it with anyone else, it's nondisclosure, you won't disclose it to anyone else. And usually you also promise we're not going to use the information you gave us for any purpose except this listed thing. Whatever we're talking about, you're going to use it for that purpose and only that purpose.
01:00
Adam Stofsky
So are NDAs actually enforceable contracts?
01:04
David Tollen
They are, yeah. So it's like any other contract, there's an exchange of value. We're providing you with this information and possibly referencing a larger business relationship we're exploring. And you're promising not to share the information and not to misuse the information, so there's no reason it can't be enforceable. NDAs, by the way, are often NDA refers to the separate contract on confidentiality. Sometimes you take the main terms of an NDA and just plug it into a larger contract. So I'm selling you some software and I don't want you to share my documentation or share information about my software. That's sensitive. So we put nondisclosure terms in the contract. You can do that by plugging those terms in, or you can sort of, in a way, attach a separate NDA, a separate contract to our software deal and they kind of become a single contract. Each references the other.
