Key terms used in NDA’s

I have made a list of key terms used in NDA’s that may help you understand:


Legal principle that maintains secrecy between parties.

Owner or disclosure

Name of the owner, business disclosing the information.


The name of the person company receiving the information.

Statement of Reasons

Paragraph defining the context  in which the information will be disclosed and why the parties want to make the information the subject of the contract.


This is the information and documents that will be the subject of the confidentiality agreement.

Penalty Clause

A fixed amount of compensation should the recipient breach the agreement.

Confidentiality Clause

This Option is the clause that requires both parties to keep the existence of the contract a secret.

Term of Engagement

This is the period of length the contract lasts for.

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