Nondisclosure agreements (sometimes abbreviated, “NDAs”) are some of the most important agreements a company can sign. At the same time, they can be some of the simplest agreements to get in place. Today I want to do a deeper dive into nondisclosure agreements, what they contain, and why they are important.
What is a nondisclosure agreement?
A nondisclosure agreement is an agreement where one or both sides agrees to keep something confidential. There are generally two types of NDAs: unilateral NDAs where only one side must keep something secret, or mutual NDAs, in which both sides must keep the thing secret.
The choice between a unilateral and mutual nondisclosure agreement usually depends on the kind of deal and disclosed information. In a business sale, for example, a seller typically makes most or all disclosures. So the seller will ask the buyer to sign a unilateral NDA. In a proposed manufacturing agreement, the manufacturer may provide information about its services while the contracting party may provide formulations. There, the parties will probably use a mutual nondisclosure agreement.
What’s in an NDA?
The average NDA is usually pretty short – maybe even just a few pages. If you’ve read a lot of
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