Description

Mutual Confidentiality Agreement

Mutual Confidentiality Agreement Preparation Form – We recommend that you gather the information in this form prior to accessing the online questionnaire.  Doing so will help you efficiently create your custom Confidentiality Agreement.

Summary

This Mutual Confidentiality Agreement (also known as a nondisclosure agreement or NDA) is a general confidentiality agreement. Parties may use this agreement when each party discloses confidential information to the other in connection with a possible commercial transaction. In other situations, only one of the parties may need to disclose confidential information. In those situations, parties should use a unilateral confidentiality agreement instead. Mutual confidentiality agreements bind and benefit both parties in the same manner. By using this agreement, parties are able to gain access to each other’s confidential information under one contract.

Details

Generally, confidentiality agreements have two purposes:

• Preserve the confidentiality of sensitive information disclosed by one party to the other.
• Restrict the recipient’s use of the other party’s confidential information except for limited purposes expressly permitted under the agreement.

Parties may add additional provisions to address industry or deal-specific concerns or to include other terms indirectly related to confidentiality. One common example of such an additional provision is a non-solicitation provision. When preparing or reviewing a mutual confidentiality agreement, you should consider whether you will primarily disclose or receive information. Additionally, you should consider the relative value and sensitivity of the information being exchanged and adjust the operative provisions accordingly. For example, if your company is the customer in an outsourcing transaction, the definition of confidential information should be as broad as possible. Further, under this example, the recipient’s nondisclosure obligations should be strict. Conversely, if you represent the service provider, you may want less restrictive obligations and a narrower definition of confidential information. Likewise, you may even desire a restriction on the types of information that will be disclosed, to minimize potential liability.

Assumptions

This mutual confidentiality agreement assumes that:

• The parties to the agreement are US entities and the transaction takes place in the US. Parties may need to modify these terms to comply with local laws.  Thus, parties should consider modifying these terms if organized or operating in a foreign jurisdiction.  Additionally, parties should consider modifying these terms if their transactions take place in a foreign jurisdiction.
• These terms are being used in a business-to-business transaction. Parties should not use this agreement in a consumer contract. Such consumer contracts may involve legal and regulatory requirements and practical considerations that are beyond the scope of this resource.
• These terms are not industry-specific. This agreement doesn’t account for any industry-specific laws, rules, or regulations that may apply to certain transactions, products, or services.