Business Strategy and Accounting Basics
Which is the contract concluded before showing unpublished technical information to a company with which joint development is being considered, in which the parties promise not to use the disclosed information for purposes other than the evaluation and not to leak it to third parties?
- ALicense agreement
- BSLA (service level agreement)
- CNon-disclosure agreement (NDA)
Show answer and explanation
Answer: C. Non-disclosure agreement (NDA)
A non-disclosure agreement (NDA) is a contract in which, when confidential information is disclosed for purposes such as evaluating a deal or joint development, the parties promise not to use it for other purposes, not to disclose it to third parties and so on. It defines the scope of information treated as confidential, exceptions (such as information already public), the term of the contract, and the return or destruction of the information after termination. In the semiconductor industry it is standard to conclude one before exchanging information such as a foundry's process data or a customer's chip design data.
- A. This is a contract in which the holder of rights such as a patent or software permits others to use them and sets the conditions and royalties.
- B. This is an agreement between a service provider and its users on the level of service quality (availability, response time and so on).
- C. Correct. It is a contract promising not to use disclosed confidential information for other purposes or leak it to third parties.
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