NDA's can be useful in helping to evaluate a potential supplier or service provider. When the two parties enter into a mutual non-disclosure agreement, they agree not to disclose any information that may be considered confidential to one another. If information is disclosed and the other party uses it for their own purposes, this could constitute a breach of the agreement.
A non-disclosure agreement (also known as an NDA) protects confidential information which is intended to be disclosed to a receiving party in order to satisfy a purpose. For example, two businesses might need to share proprietary information with each other in order to assess whether a commercial partnership is worth pursuing or not. Information which is disclosed for this purpose will need to remain confidential for a certain period which is agreed in the agreement. The confidentiality term will depend on the strategic value of the information being disclosed and the industry of the parties.
A mutual non-disclosure agreement is used when the parties entering into the agreement intend to disclose and receive confidential information. Mutual non-disclosure agreements are common in B2B discussions.
Before making a long-term decision on a supplier or service provider, a company might want to comission a proof of concept. In order to discuss the terms and practicalities of a proof a concept, the customer and the provider should enter into a mutual non-disclosure agreement.
A mutual non-disclosure agreement will ensure that both the supplier and the customer's confidential information is protected and not shared with potential competitors.
Legislate's non-disclosure agreement is suited to parties considering a proof of concept. It contains the appropriate clauses to protect your confidential information regardless of its format. This ensures that material shared as part of proof of concept discussions is protected.