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Download and customize this example of a mutual non-disclosure agreement.
Download and customize this example of a unilateral non-disclosure agreement.
If you’ve ever been asked to keep a secret, then you generally understand the concept of an NDA or non-disclosure agreement. An NDA is a legal contract that governs the transmission of confidential information outside of the two or more parties involved. It's a commonly used business agreement meant to protect the disclosing party (i.e., the business or individual who is sharing their information) from having valuable and confidential information exposed by the receiving party. Should the protected information become public, having anon-disclosure agreement in place allows the protected party to take legal action such as suing for damages.
Also known as confidentiality agreements, NDAs are an important part of a business' contract stack and are crucial to any business relationship, as they explicitly outline what information can and cannot be transmitted outside of the relationship. Common information protected by an NDA includes financials, customer information, new products, intellectual property, strategy, and trade secrets — anything you would not want competitors or the general public to know.
While NDAs can be used for several purposes, including for employment agreements, intellectual property licensing, mergers and acquisitions, etc., they typically take one of two forms. Most non-disclosure agreements are considered one-way NDA's or unilateral NDA's, but occasionally, parties sign a two-way or mutual NDA which provides certain protections for information disclosed by both parties. Deciding between a unilateral and a mutual NDA is determined by the parties involved based on what information of theirs is at risk and what information needs to be protected.
Other commonly used names for a non-disclosure agreement include:
Each of these agreements fulfills the same purpose of managing confidential information between two or more parties.
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