Which statement best describes the purpose of a Non-Disclosure Agreement?

• A. To protect trade secrets and proprietary information
• B. To outline employment duties
• C. To establish payment terms
• D. To regulate competition

Answer: (A)

Non-disclosure agreements are meant to keep certain information secret by creating a legal obligation not to share or misuse it. They define what information is confidential, who can see it, and for how long, so that sensitive data like trade secrets, product designs, customer lists, or strategic plans are protected from disclosure. This focus on confidentiality is why it’s the best description: it specifically aims to prevent the improper disclosure or use of proprietary information. Other topics like employment duties, payment terms, or competition rules belong to different kinds of agreements or clauses, not the NDA itself.