What is the purpose of a non-disclosure agreement (NDA)?

A non-disclosure agreement (NDA) is specifically designed to protect sensitive and confidential information from being disclosed to unauthorized parties. By entering into an NDA, parties agree not to share specific knowledge, trade secrets, or proprietary information they may acquire while working together. This legal agreement is crucial in maintaining the integrity of business operations, as it ensures that valuable information remains confidential, thereby safeguarding a company's competitive edge and intellectual property.

The other options do not function in the same capacity as an NDA. For example, while a formal channel for complaints pertains to addressing grievances within an organization, it does not relate to confidentiality. Outlining employee termination procedures pertains to human resources practices, not confidentiality agreements. Similarly, establishing a marketing strategy involves planning for promoting products or services, which is unrelated to protecting confidential information. Therefore, the core function of an NDA is indeed to prevent parties from sharing confidential information.