A nondisclosure agreement—also known as an NDA, a confidentiality agreement, or a confidential disclosure agreement (CDA)—is a legally enforceable contract between persons or entities who want to share confidential, proprietary information with each other without the other party or parties to the agreement (1) using the information shared for a purpose other than the intended purpose (as defined in the NDA) or (2) sharing the confidential, proprietary information with persons or entities who are not parties to the NDA.
Nondisclosure agreements are generally interpreted and enforced according to the contract law of the state where one or both parties are located, and may governed by the law of the state the parties’ agreed to in a choice of law provision in the NDA.
In California, nondisclosure agreements (NDAs) are recognized and enforceable contracts that are used to protect confidential and proprietary information shared between parties. The enforceability of an NDA in California is subject to the state's contract laws. California law requires that NDAs must be supported by consideration, meaning each party must receive something of value, and the terms must be clear and specific regarding what information is considered confidential, the scope of the confidentiality obligation, the duration of the agreement, and the intended purpose for sharing the information. Additionally, California law prohibits NDAs in settlement agreements in cases involving sexual assault, harassment, or discrimination. It is also important to note that California has specific rules regarding trade secrets and the protection of such information under the California Uniform Trade Secrets Act. Parties can choose to have their NDA governed by California law even if they are located in different states, provided they include a choice of law provision in the agreement. As with any contract, it is advisable to consult with an attorney to ensure that an NDA is properly drafted to be legally enforceable and to address any specific concerns related to the confidential information at issue.