What's a Mutual NDA?

Also known as a bilateral or two-way NDA, a mutual NDA is one type of confidentiality agreement.

A mutual non-disclosure agreement is a legally enforceable contract between two parties that governs confidential information. Unlike a unilateral (one-way) NDA which protects information from only one party, a mutual (or two-way) NDA protects information shared between the two parties outlined in the agreement.

When to use a Mutual NDA

Businesses often need to work together in joint ventures. For example, two businesses may want to collaborate to leverage one another's technology or data to strengthen their mutual offerings to customers. Or, they may consider going beyond partnering and merging to create a larger entity.  In this type of situation, confidential information may need to be shared to explore the benefits of a mutual relationship. This is an example of when a mutual NDA is a good idea. 

 

Situations in which a mutual NDA would be signed include:

  • Mergers and Acquisitions
  • Channel partners
  • Investment relationships such as startup funding
  • Competitors

If there is a mutual exchange of confidential information between your business and a competitor, both parties would sign a mutual NDA to prevent the other from disclosing sensitive or classified business information. In some cases, companies use a mutual confidentiality agreement immediately, even though only one party is sharing sensitive information.  Often times this is simply to avoid the need to go back and amend/sign new agreements as the relationship between both parties changes or matures.

 

Learn more about NDA's and get answers to frequently asked questions.

 

 

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