Also going by the name of NDA or NonDis, a non-disclosure agreement is probably the one of the most useful and most abused legal documents of today.
The basic premise is this. An NDA is a contract that states "the product or service I will be granted knowledge of will be for my eyes and ears alone. I will not talk about it to anyone who has not signed the same Agreement. If I break the dictates of the document, I agree to have my toenails ripped out."
For example, at my current work-gig, I'm working on some potentially sensetive stuff. Should anyone outside the Company learn this information, it would be to the detriment of the company, and then to me. Therefore, I had to sign an NDA as part of my intent to work package, stating I would not give out any details of the work I was doing.
The First Rule on Non-Disclosure Agreements: You do not talk about the Non-Disclosure Agreement.