Confidentiality Agreement / NDA [Mutual]

*Updated for GDPR*

This mutual Confidentiality Agreement or NDA is used where two parties are sharing information, documents or something else, like an idea, and they both want their information to be kept confidential, and not shared with anyone else or used in a way that they don’t want it to be used. Sometimes it may be only one party that is sharing information or documents and they want that party receiving the information to keep to it to themselves, and not share it or use it in a way that they don’t want them to. If this is the case, you should use the Confidentiality Agreement / NDA (One Way).

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Step-by-step guide

Let’s walk you through how to go about drafting a Confidentiality Agreement or NDA.

A confidentiality agreement or NDA is a contract in which someone agrees to keep important information that they are told by another person confidential and not disclose it to someone else or use it in a way that they shouldn’t.

There are two types of Confidentiality Agreement or NDA; a mutual one, where both parties are disclosing information to each other, and a one-way one, where only one party is doing the disclosure. This is the mutual NDA. The one way NDA can be found here.

  1. The first thing you need to do to write your NDA is to set out what the project is that you are protecting. This is the description of the reason that you are exchanging information. For example it may be that you are considering doing a joint venture or a distribution agreement, and in order to make that decision both parties needs to disclose sensitive information to each other. They will both want to feel that the information that they are disclosing is being protected properly.

  2. Then you need to outline the information that you consider to be confidential. For example, this could be business information or trade secrets or financial data.

  3. The next section outlines how long the agreement lasts – it could be for one year, five years, or the confidentiality requirements could last longer than that. It also sets out the responsibilities of each party during that time as regards the information they are receiving.

  4. It is then important to make clear what each person can do with the information that they are receiving, and also cannot do with that information. It is especially important that you spell out in advance exactly what can be done with the information.

  5. Now, the courts are normally allowed disclosure if that is legally required and there’s no stopping that. But there are is also some information that is already known publicly, and this cannot be classified as confidential.

  6. You should say what happens at the end of the agreement. For example, both parties may want all their documents back or they may ask the party who received the information to delete it off their computer systems.

  7. You should agree what happens if one of you breaches this agreement. Sometimes it’s enough to be able to sue for financial loss caused by the disclosure – or maybe you want the right to get an injunction, which is an order from the Court preventing any further damaging disclosure.

  8. And you need to make sure that the each party cannot work against the project or against the other, for example by using or copying the confidential information, as you wouldn’t want that having disclosed valuable information to the other party.

  9. The final part outlines some general rules about the information and each other’s rights.Don’t forget to state that the agreement exists under English Law and any disputes can only be brought in the courts of England and Wales. You don’t want to be sued in a foreign country using foreign laws if something goes wrong.

  10. And now this is where you get the option to try out our fantastic e-signing feature at no extra charge and close the agreement in minutes.

Remember, if you come unstuck at any point, our LawBriefs are here to help. Visit our legal advice page to submit an online enquiry or call us on 020 7148 1066.

Best of luck in your SME journey.

Document drafted by:

Clive Rich LawBrief

Clive Rich is a highly experienced entertainment and digital media lawyer, who has also successfully run digital businesses for companies such as Sony and Bertelsmann.

A qualified barrister, he has been a lawyer for almost 30 years and has drafted and crafted contracts for a broad spectrum of multi-nationals, major organisations and brands, including Yahoo, Apple, Napster, SanDisk, Myspace and the BBC.

He has also previously run his own legal practice, Rich Futures Ltd in association with the Top 30 UK law firm, Olswang LLP, representing a variety of technology companies and SMEs.

Clive is a qualified Mediator through the Centre for Effective Dispute Resolution (CEDR) and a qualified Arbitrator through the Central Institute of Arbitration (CIArb) in London.

As a negotiator, he is the author of “The Yes Book: the Art of Better Negotiation”, published by Random House in March 2013. Clive has also designed and successfully launched a negotiation App called “Close My Deal”, enabling people to understand the basis of successful negotiation and apply the skills to everyday scenarios. He has provided negotiating coaching and deal making services to a wide range of large organisations and SMEs. He has also been a board member of a number of digital SMEs.

Clive is a devoted father and husband, but when he is not spending time with his family, he likes to unwind by playing golf or watching a variety of sports (football, rugby, cricket). He's a lifelong Milwall FC fan... but don't hold that against him!