An NDA (non-disclosure agreement) is a contract in which one or more partners promise to respect trade secrets.
You can use a nondisclosure agreement for any type of information that you believe should only be shared with a specific person or company. For example, the information may be commercially valuable, such as information that you exchange in the context of negotiations about a new invention or the purchase of another company. An NDA is also normally used when sharing information about intellectual property.
A nondisclosure agreement is not mandatory. But if you want to keep sensitive information secret, it is wise to make agreements about this in an NDA. This way you prevent damage and procedures.