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Things you need to know about Mutual Non-Disclosure Agreement.


1. What is a Mutual Non-Disclosure Agreement?

A Mutual Non-Disclosure Agreement (“NDA”) facilitates the sharing of confidential business information & trade secrets between persons or organizations.  Under the NDA both parties share confidential information with each other and agree to keep the said information confidential and not to disclose the same.

An NDA contains basic terms such as (1) what is defined as confidential information; (2) what is excluded from the definition of confidential information; and (3) under what circumstances the confidential information may be disclosed. With Legal Tree you can create an NDA with only the most basic terms or you can make it as detailed and complex as needed for your business.


2. When do you need a Mutual Non-Disclosure Agreement?

A Mutual NDA is necessary if you will mutually share confidential business information & trade secrets with another person or organization.  For instance, an NDA is advisable for parties preparing to enter into a merger and need to disclose confidential information with each other.

A Mutual NDA allows both parties to know their respective duties & obligations when it comes to any confidential information they receive, and to be held liable for any violation of the NDA (i.e. unauthorized disclosure of the confidential information).


3. What’s the difference between a Mutual NDA and a Unilateral NDA?

A Mutual NDA involves both parties mutually sharing confidential information with each other and agreeing not to disclose said information.  

On the other hand, a Unilateral NDA has only one party disclosing confidential information (the “discloser”) to the other party (the “recipient”).  The discloser shares confidential information to the recipient while the recipient agrees to keep the information confidential and not to disclose the same.


4. How can a Mutual Non-Disclosure Agreement protect you?

Businesses will necessarily share confidential business information & trade secrets with each other over the course of certain transactions (i.e. merger).  A Mutual NDA protects both parties by maintaining the confidentiality of such information and preventing leaks to 3rd persons, particularly competitors.  The agreement also allows a party to hold the other liable for any breach of the NDA by resorting to legal action.

If a party violates the NDA the injured party can resort to legal action and (a) file an injunction suit (to prevent the unauthorized disclosure of confidential information); (b) claim damages; and (c) claim any other penalty as agreed upon in the NDA.  


5. What information do you need to create the Mutual Non-Disclosure Agreement?

To create your Mutual NDA you’ll need the following minimum information:

  1. The type of both parties (i.e. individual or business) as well as their name and details (i.e. nationality and address)
  2. The period which the parties are required to keep the information confidential
  3. The consequences for violating the NDA.

Related Documents.

Activities that involve a Mutual Non-Disclosure Agreement sometimes use the following documents. You may be interested in them:

Document Name