When two parties enter into a business negotiation, they often want to protect the sensitive information shared between them. With a Mutual NDA, both sides agree, under the penalty of law, to refrain from discussing details of what is learned about each other and the business arrangement with external parties.
The Mutual NDA is most commonly used to protect proprietary information that meets the following criteria:
The data for which the availability is either limited or unknown to the public.
If the owner of the information wants to keep it a secret
The information provides the owner with a significant advantage.
A Mutual NDA is a contract between two parties to refrain from sharing the information identified in the agreement.
Depending on the context and preferred terminology, a Mutual NDA may also be known as:
Confidential Disclosure Agreement (CDA)
Confidentiality Agreement (CA)
Secrecy Agreement (SA)
Proprietary Information Agreement (PIA)
If two parties want to protect the sensitive information learned about each other (during a business negotiation, business arrangement, or otherwise), they can enter into a Mutual NDA. By signing the NDA, both parties are forbidden from sharing the specified information in whole or in part.
While mutual NDAs mostly involve business entities, they can also be used by a business and an individual. For example, it is often used between an employer and an employee. The employee is forbidden to disseminate the company information learned due to carrying out his or her employment duties.
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The Mutual NDA, when entered into between two parties, is a guarantee that one party will not share any confidential information learned about the other party. This is a crucial document that protects your most valuable information and thus must pass legal muster.
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To create your document, please provide:
Date: The date when the Mutual NDA becomes effective
Name and contact information: Legal names and addresses of both parties in the NDA
Confidentiality: The nature of the Mutual NDA or the type of information covered
Term: The duration of the NDA
State laws: The state’s laws that apply
Non-Circumvention Covenant: In the context of an NDA, this is an agreement to not circumvent or bypass the other company, especially with the classified information gained.
Receiving Party: In the context of an NDA, this is the party receiving sensitive information.
Disclosure Party: In the context of an NDA, the party discloses confidential information to the receiving party.
The Mutual NDA needs to be signed by both parties. In the case of business entities, an authorized representative signs the document on its behalf.
After signing, the Mutual NDA becomes effective and legally binding. It does not require filing with any government body. Optionally, the document can be witnessed and notarized to strengthen the validity of the signatures.
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