What type of agreement defines the conditions under which entities can use data and information shared between them?

A Non-Disclosure Agreement (NDA) specifically outlines the terms under which confidential information and data can be shared, ensuring that the parties involved understand their obligations regarding the protection and use of that information. NDAs are crucial for establishing trust between entities, defining what information is considered confidential, how it can be used, and the consequences of unauthorized disclosure. They serve to mitigate risks associated with data sharing by legally binding participants to respect privacy and confidentiality stipulations.

In contexts where data needs to be shared but also protected from misuse, NDAs are the preferred mechanism. They make it clear that any information exchanged should not be disclosed to unauthorized individuals and specify the limited purposes for which the data can be utilized. This creates a legally enforceable agreement that fosters a secure environment for collaboration.