Things To Know About A Mutual Non-Disclosure Agreement

Essentially, a contract is a written agreement negotiated and exchanged between two parties. In any contract, the enforceability of the agreement must be considered. The consideration is the basic exchange between the parties supporting the contract. Consideration is what one party gives to the other party: money, goods, services, or promises. 

What is a Mutual NDA

Mutual non-disclosure agreement, or mutual confidentiality, is just a contract in which both parties agree to keep certain information confidential. A Mutual Non-Disclosure Agreement (Mutual NDA) is that both parties share confidential information and both parties agree to keep the other party's information confidential, so the consideration is a mutual commitment made by both parties to maintain the other party's confidentiality. 

The terms of the mutual confidentiality agreement 

Wondering about what are the clauses that should be included in the mutual confidentiality agreement? Then worry not. We're enlisting the following clauses for the same.

• Clearly describe what information will be shared and considered confidential by all parties. Explain what is not considered as confidential information. 

• Describes why the information is shared and how another party uses the information. 

• Clearly state the duration of the contract and the handling of confidential information at the end of the contract. Generally, it must be returned within the specified time. If it cannot be returned, it must be destroyed. 

• Describes the restrictions on what information can be shared and with whom it can be shared; both parties must limit the necessary information exchange on a "need to know" basis.  

• Explains the rights of both parties when the other party violates the agreement by disclosing or misusing confidential information. 

• Confidentiality obligations must continue beyond the term of the agreement, and will only be waived if the information is legal and legally disclosed. 

When and where to use a Mutual NDA?

A mutual non-disclosure agreement can be a separate agreement, or the relevant terms of a mutual NDA agreement can be combined into a broader agreement. Common situations suitable for mutual nondisclosure agreements may include the purchase or sale of a business when both parties conduct due diligence. 

Business advisors often use mutual confidentiality agreements to allow them to securely share their intellectual property with their clients, and clients can confidently share relevant business details during the advisory process. 

In a Nutshell 

Remember, the best way to keep a secret is to keep it a secret to yourself. When you cannot keep confidential or proprietary information confidential, always try to limit the amount of information shared and with whom you share it. If it can't be done, NDA is your next best protection.