Non-disclosure agreement (mutual)

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A mutual or two-way non-disclosure agreement protecting the information and interests of both of the parties.

Author: Alasdair Taylor
Updated: 29 November 2019
Length: 5 pages (min.)
Notes: 7 pages (min.)
Format: MS Word (.DOCX) 

Confidentiality clauses are one of the most common types of B2B contract provision, and confidentiality agreements are one of the most common types of B2B contract. Almost all businesses will execute a confidentiality agreement at some point, and some sign dozens every day.

This particular agreement template is designed for "mutual" disclosure situations: that is, situations where two businesses are disclosing confidential information to one another.

In this template, the definitions and core obligations are mirror images, but they can be adapted so that parties' obligations diverge, as required.

Core confidentiality obligations in the NDA

The core obligations are as follows.

  • First, there is an obligation to keep the information in question confidential. This is the essence of a confidentiality agreement, and some of the other core obligations are in fact elaborations of this principle, rather than distinct obligations.
  • Second, the document includes a prohibition upon the disclosure of the information to any person, save where expressly permitted by the agreement. Exceptions to the non-disclosure principle include: (i) where the disclosing party has given its written consent to disclosure; (ii) disclosure to specifically identified categories of person (eg employees); and (iii) disclosures required by law.
  • Third, the template incorporates an express requirement that information be held in a reasonably secure manner. What exactly this requires will depend upon context. You may wish to add specific security obligations over and above this general requirement.
  • Fourth, the recipient may be required to act at all times in good faith.
  • Fifth, the uses to which the information may be put may be restricted to a "permitted purpose" that is clearly defined.

Standard vs premium NDA

The standard NDA is simply a cut-down version of the premium NDA. The additional clauses in the premium document cover such matters as: publicity-related obligations; intellectual property rights in information disclosed; data protection issues; and indemnities.

Publicity: The premium template provides that neither party may make public disclosures relating to the agreement. However, the parties may agree to specific permitted public disclosures.

IPR: Intellectual property rights are not assigned or transferred under this NDA, nor is there any licence of intellectual property rights.

Indemnities: The parties have the option of including indemnity clauses, providing for more generous compensation in the event of a breach of contract.

Mutual NDA contents

  1. Definitions
  2. Term
  3. First Party's confidentiality obligations
  4. First Party's publicity obligations (premium only)
  5. Second Party's confidentiality obligations
  6. Second Party's publicity obligations (premium only)
  7. Intellectual property rights (premium only)
  8. Warranties
  9. Indemnities (premium only)
  10. Termination
  11. Effects of termination
  12. General
  13. Interpretation

Why should I use an NDA? Doesn't the law of confidence protect my information?

Yes, provisions of law relating to confidence may protect confidential information without there being a confidentiality agreement, so why sign an agreement? The advantages of using a formal confidentiality agreement are several and significant.

  • First, there is greater certainty about what is being protected, as the information that is the subject of the agreement can be specified.
  • Second, the nature and scope of the obligations placed upon the recipient of the information can be clearly delineated.
  • Third, the consequences of a breach of a confidentiality obligation can be specified.

Does the NDA allow us to disclose the confidential information to our employees?

Yes, optionally.

Can this document be turned into a unilateral confidentiality agreement?

Yes, and with relative ease. However, it is even easier to buy the unilateral version!

Are there any differences between the obligations imposed on each party?

The terms set out in the template in relation to each party are the same. However, you may edit the document so that different obligations are imposed upon each party.

What is included in the data protection clause in the premium document?

This covers two things. First, it has basic "data processor" wording. The purpose of this is to help a data controller party disclosing personal information to a data processor party to comply with its obligations under data protection legislation in relation to such disclosures. Second, it has warranties from the disclosing party that the disclosure of the personal information, and its use in accordance with the terms of the confidentiality agreement, will not infringe anyone's rights.

Ask a question

This non-disclosure agreement is included in each of these packs:

  • Non-disclosure pack (both versions of this document are included in the pack)
  • Business pack (the standard version of this document is included in all versions of the pack)
  • Software developer pack (the standard version of this document is included in the standard version of the pack, and both versions of this document are included in the premium version of the pack)
  • Web design and development pack (both the premium and standard versions of this document are included in the pack)

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