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Confidentiality Agreement vs NDA – What’s the Difference?

Confidentiality and non-disclosure agreements, or NDAs, are both meant to protect sensitive information, but they serve different purposes. In this blog post, we’ll discuss a confidentiality agreement vs NDA to help clarify their differences.

Confidentiality Agreement

Essentially, confidentiality agreements are legally binding documents requiring the involved parties to keep classified information hidden from the public, third parties, or competitors. However, it’s not enough for everyone to agree to not disclose anything – they need to make sure it remains a secret.


Like a confidentiality agreement, an NDA is also an enforceable contract that stops someone from sharing specific private information without proper authorization. However, this doesn’t necessarily apply to all of the involved parties. With an NDA, at least one person has a duty not to reveal any relevant knowledge without permission.

What’s the Difference Between a Confidentiality Agreement vs NDA?

The key difference between NDAs and confidentiality agreements is that confidentiality agreements bind both parties to keep the information confidential, while NDAs commonly only uphold secrecy for one party. In other words, NDAs work better in situations where only one side is sharing secret information.

For example, individuals often use non-disclosure agreements before applying for a patent. Since revealing a patented idea to the public cancels most people’s rights to file for a patent in several jurisdictions, an NDA is created to keep confidentiality between creators and others until they apply.

Confidentiality agreements, on the other hand, are usually necessary when parties are working together on a project that requires sharing delicate information. For example, a manufacturer and supplier may decide to use a confidentiality agreement to help dictate their relationship. They can then give each other the sensitive information they need without worrying about anyone disclosing anything. 

Can an NDA and a Confidentiality Agreement Be Used Together?

Although you can use non-disclosure and confidentiality agreements, in most cases, only one is necessary. By matching the agreement to the situation, you can ensure that your sensitive information will be safe. There are times when both a non-disclosure agreement and a confidentiality agreement could be used.

For example, with agreements that go over large and complicated transactions, you could see both types of documents. Perhaps one part of the transaction only requires information from one party to another, while the other stage needs data to be shared between two parties. In this case, you would use a non-disclosure clause for the first section of the deal and then employ a confidentiality clause during the second phase.

The Bottom Line

Non-disclosure and confidentiality agreements are legally binding documents that can help protect your business’s information. NDAs are often used to safeguard trade secrets, while confidentiality agreements are more commonly used when multiple parties have access to sensitive information. It’s important to know the subtle differences between these two types of contracts before signing one to ensure you are getting the best protection for your business.

You never know if you’re going to need to sign a confidentiality agreement or NDA when you’re buying and selling businesses, including websites. If you’re currently in the market for a new website, click here to see how Motion Invest can help!

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