Non-Disclosure Agreement

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What is a Non-Disclosure Agreement (NDA)?

A Non-Disclosure Agreement (NDA) is a contract that concerns confidential information that can be technical and/or commercial in nature. With the confidential information conferring a benefit to the receiving party, an NDA is an agreement between the disclosure and recipient of the confidential information to protect it by not disclosing it to third parties for a specified period. 

NDAs support a whole host of purposes, they can be used to: 

  • Present ideas to potential partners, investors or distributors; 
  • Share financial or business information to prospective buyers 
  • Showcase a new product or technology 
  • Receive services from a party who will have access to confidential information 
  • Sharing confidential or proprietary information to prospective employees, employees, consultants and interns. 

‍There are three types of NDA that we will explore in detail below: 1- way NDA; Mutual Agreement and Enterprise Mutual.

One-Way NDA

A One-Way NDA is used where only one party has confidential information to disclose to the other side.  A One-Way NDA should outline the purpose of the NDA, its coverage, the start date and term and the type of information covered by it. The NDA should also outline jurisdiction and cover all forms in which information will be disclosed. Typically, the One-way NDA will also make clear that it does not grant any rights or licence to the IP of the disclosure. 

Under a One-Way NDA, the recipient under the NDA will be under certain obligations. These obligations will typically include: 

  • Not using any confidential information for unauthorised purposes
  • Not to disclose confidential information to third parties 
  • Keeping confidential information secure 
  • Surrendering all copies and records of confidential information on request by discloser

Mutual NDA

A mutual NDA is used where both parties disclose sensitive information to each other. A mutual NDA should make the coverage of the agreement and the type of information covered clear as well as defining its start date and term. Like the one-way NDA, the forms of information should be made clear, the jurisdiction of the NDA and it should contain a clause stating that the NDA doesn't grant either party rights to the other’s IP. 

Under a mutual NDA, the parties will enter into an agreement:

  • Not to use any confidential information for unauthorized 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

Enterprise Mutual NDA

An Enterprise Mutual NDA is a contract between two enterprises who disclose confidential information to one another. Enterprise NDAs allow parties to discuss collaboration and corporate fit for potential partnership or commercial agreements or for proof of concept.The information can be technical and, or, commercial in nature and may include secondary information which isn't exclusively confidential. As each party is a recipient of information, each party enters under a duty to protect that information.

An Enterprise Mutual NDA will outline the effective date of the NDA and its term, the type of information covered and exclusions of liability. Under the NDA, both parties agree to comply with all applicable laws and regulations and not to disclose confidential information to parties 

other than those authorised under the agreement. The parties agree that the enterprise will be liable for any breach of the NDA by authorised persons and on limited liability for losses incurred by reliance on disclosed information. Both parties will also agree to seek one another’s consent for certain announcements. 

The recipient(s) under an Enterprise Mutual NDA undertake: 

  • 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

Like the One-way and mutual NDAs, jurisdiction and IP rights should be made explicit in the NDA. In an Enterprise Mutual MDA, you might also want to include a clause stating that there is no commitment to enter into business with the other party and the exclusion of third party rights. It is sensible also to state that no warranties will be made as to the confidential information’s merchantability, accuracy, or whether its exploitation infringes any third party intellectual property rights and that liabilities for breach of confidentiality can include equitable relief. 

Exclusion of obligations under NDAs: 

Under an NDA, it is common to exclude disclosure of certain information, such as that: 

  • Required by law
  • To agents, attorneys, or third party contractors
  • In the public domain
  • Already known which wasn’t subject to confidentiality
  • Independently developed by recipient
  • Disclosed to recipient by third party under no obligation of non-disclosure

Key features of the Legislate NDA

Legislate understands the differences between standard and enterprise NDAs, ensuring both parties are suitably protected where necessary. Our users like Legislate’s NDAs because:

  • Option to pick whether the NDA is one-way or two-way
  • Supports a wide range of purposes
  • If you’re sharing technical or business info, guarantee you create the agreement which is best for you
  • Legislate speeds up the contracting process, allowing you to focus on what’s important
  • Legislate’s NDAs offer parties protection of secondary information.
  • Our NDAs permit a wide range of purposes, ensuring we can cater for all your business needs.


How to create a NDA with Legislate

Creating a NDA with Legislate is straightforward. The party just needs to specify the agreement’s terms, such as whether the NDA is one-way or mutual. They can then invite the other party who, once they have previewed the agreement and accepted the terms can sign it.


Parties can add companies as parties to the NDA and can utilise Legislate’s Activity Tab to discuss or negotiate its reach.  


NDA walkthrough


For more information on how to create your agreements with Legislate, sign up, read our NDA tutorial or book an introductory call with one of our team members.

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Non-Disclosure Agreement

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