Article author
Charles Brecque
  • Updated

A non-disclosure agreement is a contract between the discloser and recipient of confidential information lasting for a specified term. The confidential information can be technical and/or commercial in nature, and constitutes a benefit conferred to the receiving party.

The recipient of confidential information must protect it by not using it for unauthorised purposes and not disclosing it to third parties. In a Mutual Agreement, both parties disclose confidential information, and are considered recipients of the other’s information. 

NDA Purposes

  • Presenting invention or business idea to potential partner, investor, or distributor.
  • Sharing financial or marketing information to prospective buyer of business.
  • Showing new product or technology to prospective buyer or licensee.
  • Receiving services from party who will have access to sensitive information.
  • Sharing confidential or proprietary information to employees.

1-way Agreement 

Core elements

  • Purpose
  • Coverage
  • Start date
  • Term
  • Type of information covered

Recipients' rights and obligations

  • Not to use any confidential information for unauthorised purpose - authorisation must be in writing.
  • Not to disclose confidential information to third parties.
  • To keep confidential information secure.
  • To surrender all copies and records of confidential information on request by discloser.

Excludes disclosure of

  • Information required by law.
  • Information to agent, attorney, or third party contractors.
  • Information in the public domain.
  • Information already known which wasn’t subject to confidentiality.
  • Information independently developed by recipient.
  • Information disclosed to recipient by third party under no obligation of non-disclosure.

Other relevant terms

  • Jurisdiction.
  • Covers all forms in which information disclosed.
  • Does not grant any rights to IP of discloser.

Mutual Agreement 

Core elements

  • Coverage
  • Start date
  • Term
  • Type of information covered

Parties’ rights and obligations

  • Not to use any confidential information for unauthorised purpose - authorisation must be in writing.
  • Not to disclose confidential information to third parties.
  • To keep confidential information secure.
  • To surrender all copies and records of confidential information on request by other party.

Excludes disclosure of

  • Information required by law.
  • Information to agent, attorney, or third party contractors.
  • Information in the public domain.
  • Information already known which wasn’t subject to confidentiality.
  • Information independently developed with no reference or use of the other party’s information.
  • Information disclosed by third party under no obligation of non-disclosure.

Other relevant terms

  • Jurisdiction.
  • Covers all forms in which information disclosed.
  • Does not grant any license or rights to other party’s intellectual property.

Enterprise Mutual NDA 

An enterprise mutual non-disclosure agreement is a contract lasting for a specified term between two enterprises disclosing confidential information to each. Since both parties disclose confidential information, they are considered recipients of the other’s information. 

The confidential information can be technical and/or commercial in nature, and may include secondary information which is not exclusively confidential. The disclosure constitutes a benefit conferred to the receiving party.

The contract establishes the duties and liabilities undertaken by both parties, and the obligations owed to the disclosing party. The contract also includes relevant representations and exclusions. As recipients, each party must protect the discloser’s confidential information by not using it for unauthorised purposes and not disclosing it to unauthorised persons.

Purpose

  • To allow the parties to discuss collaboration and corporate fit regarding a potential partnership agreement, commercial agreement, or proof of concept. 

Core elements

  • Effective date + term
  • Type of information covered
  • Exclusions of liability

Shared rights and obligations 

  • To comply with all applicable laws and regulations.
  • Not to disclose confidential information to parties other than authorised persons.
  • Liable for any breach by an authorised person.
  • Own any reproductions of their confidential information made by other party.
  • Limited liability for losses incurred by reliance on disclosed information.
  • To seek each other’s consent for certain announcements.

Recipient undertakes 

  • To protect confidential information and only use it for agreed purpose.
  • To keep Discloser’s confidential information separate from own documents.
  • To apply security measures equivalent to those applied to own confidential information.
  • Not to analyse Discloser’s confidential information.
  • To inform Discloser of any known breach.
  • Not to make copies unless reasonably necessary for the agreed purpose.
  • To surrender copies of confidential and secondary information upon termination or on request by Discloser.

Excludes disclosure of

  • Information required by law.
  • Information in the public domain.
  • Information already known which was not subject to confidentiality.
  • Information demonstrably developed independently of the other party’s disclosure of confidential information.
  • Information disclosed with no restrictions by third party.
  • Information disclosed with the prior written consent of the Discloser.

Other relevant terms

  • Jurisdiction
  • Does not grant any license to the receiving party.
  • No commitment to enter into business with the other party.
  • Liability for breach of the Agreement include equitable relief.
  • No warranties made as to confidential information’s merchantability, accuracy, or whether its exploitation infringes any third party intellectual property rights.
  • Exclusion of third party rights.

Please don't hesitate to reach out if you have any questions or suggestions here.

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