A contract that prevents one or more parties from sharing confidential information with outsiders.
A Non-Disclosure Agreement (NDA), also called a Confidentiality Agreement, is a contract in which one or more parties agree not to disclose specified confidential information to third parties. Mutual NDAs bind both parties; one-way NDAs bind only one party (typically the recipient of information).
NDAs are useful before sharing sensitive business information with potential partners, vendors, consultants, or potential investors. However, their utility has limits. A reputable VC will rarely sign an NDA before hearing your pitch — they see hundreds of companies and don't want the liability of being restricted from investing in other companies in the same space. And while an NDA creates a legal obligation, enforcing it is expensive and difficult, especially against someone who has already misused your information.
For employees and contractors, confidentiality obligations are typically included in their PIIA or contractor agreement rather than a standalone NDA. For advisors, a brief mutual NDA before substantive conversations is reasonable. For customer relationships where you'll share proprietary data, an NDA or confidentiality clause in the service agreement is standard.