Mutual Confidentiality Agreement

A Mutual Confidentiality Agreement is used to protect the confidential information of both parties involved in the agreement.

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Confidentiality Agreements are, in general, a common occurrence across businesses and industries. They are usually used to protect a company, employer, or an individual and their interests.

However, when two businesses are going through a merger or working on a joint project, they can benefit from a Mutual Confidentiality Agreement. With the agreement in place, the companies can be relatively confident that any confidential information disclosed will be safe and protected.

What Is a Mutual Confidentiality Agreement?

A Mutual Confidentiality Agreement protects the sensitive information of the two parties signing the agreement. Most often, these parties are businesses, but not exclusively. A Mutual Confidentiality Agreement can be used between two individuals or a company and an individual.

In any case, the idea is the same – the agreement outlines what is considered confidential information, and both parties promise not to disclose it to anyone. Information leaks are taken very seriously in some industries, in which companies take every precaution to prevent that from happening.

Other Names for Mutual Confidentiality Agreement

Depending on your state, a Mutual Confidentiality Agreement may also be known as:

  • Bilateral Confidentiality Agreement
  • Mutual Non-Disclosure Agreement
  • 2-Way NDA

Who Needs a Mutual Confidentiality Agreement?

Individuals and companies possessing valuable proprietary information benefit from having a Mutual Confidentiality Agreement. In practice, this type of confidentiality agreement is most often used between businesses. For example, if two companies are launching a campaign together, they will most likely enter into a Mutual Confidentiality Agreement.

Why Use 360 Legal Forms for Your Mutual Confidentiality Agreement

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Create your own documents by answering our easy-to-understand questionnaires to get exactly what you need out of your Mutual Confidentiality Agreement.

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How to Create a Mutual Confidentiality Agreement

Confidentiality Agreements must be as specific as possible. Leaving out an important detail could lead to the document being voided by the court.

Let 360 Legal Forms help with our extensive library of attorney-vetted legal forms. The process is fast and easy. All you have to do is fill out our easy-to-understand questionnaire. Once complete, simply download your form as a PDF or Word document from your secure online account.

What Information Will I Need to Create My Mutual Confidentiality Agreement?

To create your document, please provide:

  • Party Information: Full legal names of parties signing the agreement, the contact information, and the address.
  • The Effective Date: The date when the deal goes into effect.
  • Governing State: The state's law applying to the agreement.
  • Purpose: An explanation of why the confidential agreement is necessary.
  • Examples: One or several examples of what is considered confidential information.
  • Additional Clauses: Non-compete, non-solicitation, or any other essential clauses.
  • Period of Agreement: Specification of the duration of the agreement, indefinite or otherwise.
  • Signatures: All parties must sign the confidentiality agreement.

Mutual Confidentiality Agreement Terms

  • Cease and Desist: A legal letter sent to a business or person demanding the ceasing of a specific activity or activities, which is required before filing a lawsuit
  • Injunction: A court order instructing an entity to refrain from a particular action at the threat of contempt of court
  • Severability: The quality of a document, such as an agreement or a lawmakers' bill, being valid even when some parts or provisions are struck out (valid without the offending parts or provisions)
  • Acceptance: A statement in the agreement expressing that both parties accept the terms listed
  • Proprietary Information: Trade secrets, confidential information
  • Unilateral: Affecting or concerning only one side
  • Bilateral: Affecting or about both sides
  • Disclosure: An act of revealing confidential information
  • Non-Compete: A clause where one party agrees to not compete against the other party
  • Non-Solicitation: A clause forbidding one party from soliciting or poaching employees and clients

Mutual Confidentiality Agreement Signing Requirements

A Mutual Confidentiality Agreement requires the signature of both parties. Only then can it be legally binding. Notarization is unnecessary, but having a witness present could be useful in proving the document's authenticity.

What to Do with Your Mutual Confidentiality Agreement?

After both parties sign the Mutual Confidentiality Agreement, they should receive a physical copy of the document. It is essential to keep the form safe if you ever need to present it in court or to a third-party.

Frequently Asked Questions

The Unilateral Confidentiality Agreement is the standard where it is used to protect just one party of the agreement. Most companies use it to protect their proprietary information when hiring employees. On the other hand, the Bilateral Confidentiality Agreement is more common among businesses because it protects both of their interests and trade secrets. In a unilateral agreement, the other party, usually an employee, is not protected, and that is usually because they do not possess or have to disclose any information, commercially valuable or not.

When two companies discuss a merger or joint venture, any contemplation of a unilateral confidentiality agreement can create bad faith. In this case, it is the Mutual Confidentiality Agreement that is more effective at preventing the theft of ideas, trade secrets, and other valuable information. In addition, not having a bilateral agreement means that companies or individuals open themselves up to potential negative publicity.

There is no essential difference between these two types of agreements. In most cases, and across industries, they are used interchangeably. However, one could argue that the term "confidentiality agreement" is used when someone tries to emphasize the level of secrecy involved. It is a more commonly used term in employment or business. An NDA is more commonly unilateral and often used to protect personal or sensitive information from becoming public.

Most importantly, a Mutual Confidentiality Agreement cannot be used to cover up illegal activity. In that case, the agreement would be invalid. It must not include information that was previously known to the party pledged to confidentiality. Additionally, information that is considered public also cannot be in the confidential agreement. Finally, if the data in question is subpoenaed, it is not considered a violation of the agreement for one party to comply with the subpoena.

Often, Mutual Confidentiality Agreements become void because the stipulations cannot be enforced by law. And that usually happens because of several common mistakes. For example, if a Mutual Confidentiality Agreement is too broad or unreasonable, the courts may be inclined to dismiss it. Also, specifying the wrong jurisdiction in the agreement is a frequent mistake. And finally, the problem might be that one of the parties did not have sufficient authority to sign the agreement in the first place.

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Applicable to all 50 states
Applicable to all 50 states

Our documents are vetted by lawyers and are applicable to all 50 states.