Certified Professional Contract Manager (CPCM) 2025 – 400 Free Practice Questions to Pass the Exam

The intent of a nondisclosure agreement (NDA) is primarily to bind parties to confidentiality concerning shared proprietary information. This type of agreement is crucial in protecting sensitive information, trade secrets, and other proprietary data that one party may disclose to another during discussions or negotiations. The NDA establishes a legal obligation for the receiving party to keep the disclosed information confidential and outlines the parameters of its use.

By ensuring that both parties understand their obligations regarding the treatment of proprietary information, an NDA fosters trust and encourages open dialogue when sensitive matters are involved. Such agreements are commonly used in various contexts, including business negotiations, employment relationships, and collaborations, to safeguard valuable information from being disclosed to unauthorized entities.

Other options mentioned do not represent the primary function of a nondisclosure agreement. While establishing contracts for goods and services, negotiating pricing strategies, and specifying contract duration are common business practices, they are not the central purpose of an NDA. The focus remains on confidentiality and protecting sensitive information from exposure, which is why the identified choice stands correct.