Mutual Non-Disclosure Agreement Help Guide

A mutual non-disclosure agreement (NDA) helps prevent unauthorized disclosures of confidential information between two parties. LegalNature's agreement uses a comprehensive definition of "confidential information" and "trade secrets" to ensure any and all proprietary information remains well protected.

Note that the agreement often references a "Recipient" and a "Discloser" of confidential information or trade secrets. As this is a mutual NDA—also called a bilateral NDA—either party may be a Recipient or a Discloser depending upon the situation. Whenever a party receives such information it is the Recipient, and whenever a party discloses such information it is the Discloser.


The agreement requires the parties to exercise the utmost diligence and their best efforts to guard and protect against unauthorized disclosure or theft of confidential information and trade secrets. If one of the parties learns that someone else is making unauthorized disclosures, then that recipient is required to notify the other party.

Agreement Length

The parties' duty of confidentiality can last as long as is needed for the parties' business purposes. Depending on the circumstances, the parties may agree on a length as short as a few months or may agree to make the duty last forever. It is best practice to limit the duration to as short as is necessary to protect each parties' legitimate business interests.

Disclaimer of Warranties

The terms of the agreement state that neither party is making any guarantees as to the accuracy of the confidential information disclosed or as to how such information will be used. Most of the time it is a good idea to disclaim all warranties as to the confidential information and trade secrets. The main instance that you would not disclaim warranties is if a party has made express promises that the information is correct and how it plans to use the information.

Ownership of Intellectual Property

Under the terms of the agreement, each party will retain all work produced by the contractor as a result of the disclosure of confidential information.

Dispute Resolution

It is usually recommended that you include an arbitration provision. This requires that disputes between the parties are to be settled through binding arbitration, thereby avoiding the time and expense of going through the formal court system.

Next, indicate which state's laws will govern the agreement. Usually, the governing state is the state where the parties transact business.

Additional Terms

You can add additional terms and conditions as desired. This allows you complete flexibility to tailor the document to reflect the specific situation and true intent of the parties, but be sure to preview the agreement first so that you know what has already been included.

Specific Confidential Information and Trade Secrets Protected

As mentioned above, LegalNature's agreement uses a definition of "confidential information" and "trade secrets" designed to ensure maximum protection of the parties' information. Therefore, you are not required to specify the specific information that is to be kept confidential. However, including this information with your additional terms may help clarify the expectations of the parties.

Executing Your Agreement

  • Have all parties sign and date the signature lines where indicated. Electronic signatures are allowed by the terms of the agreement. The parties can also sign copies sent to each other by e-mail, fax, or other electronic means. If you included an arbitration provision, make sure that each party signs the arbitration exhibit.
  • Make sure that all parties get a copy of the fully executed agreement.
  • That's it! You may rest assured that the disclosing party's confidential information will remain safe and secure.

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