Mutual or Unilateral NDA?


2

Which do you think is better to begin a relationship with a vendor/contractor or partner/co-founder? What are some of the advantages or disadvantages of choosing one over the other?

Thanks

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asked Feb 5 '10 at 11:37
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Newyuppie
441 points

3 Answers


2

Mutual is likely to be appropriate with a partner / co-founder because you both are (at least in theory) similarly situated.

Either could be appropriate with a vendor / contractor, depending on who has which information to be protected. (Samples are available at my Downloads page.) However, in my experience NDAs often are not required because the parties go promptly to a supplier / independent contractor agreement that has relationship-specific confidentiality provisions (i.e., that are more appropriate than a generic NDA).

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

answered Feb 5 '10 at 11:59
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Dana Shultz
6,015 points
  • I wonder if there is any way (via say ToS on this site) to eliminate the need of that bullshit Bar Association mandated disclaimer. Doesn't it take an engagement agreement to establish A-C relationship. – Apollo Sinkevicius 9 years ago
  • Although I agree in principal, it's also not really hurting anything to have it there. If a disclaimer makes a legal professional feel more comfortable helping/sharing on the site, then by all means let it be. :) – Rick Dt 8 years ago

2

My preference is always for Mutual NDA's. The advantage is that both sides are protected and you say that your partners info is just as important as yours. The disadvantage to a mutual is that one persons information is not protected. If that will somehow limit your ability to do business (e.g. you are a huge multi-national with many vendors), the it becomes a bit cumbersome to always wonder if you violate the NDA. If you are a micro-ISV, you really don't have that problem.

answered Feb 5 '10 at 12:39
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Jarie Bolander
11,421 points
  • Interesting, but what do you mean by "one person's information is not protected"? – Newyuppie 9 years ago
  • If it's a one-way (e.g. not mutual), then one party has not responsibility to keep whatever information they have received private. So lets say Company A is disclosing something to Company B. A one-way NDA exists that says Company B will not disclosure Company A's information but Company A does not have the same responsibilities to keep information Company B tells them. – Jarie Bolander 9 years ago

2

Selecting the right NDA can convey your intent.

Sometimes you don't want the partner you are working with to reveal any confidential information. By selecting a one-way NDA you are conveying this intent.

For example, as a software company sometimes we want to work with another software company but I want to make sure they don't come back to us in 5 years and claim one of our products infringes their confidential information. By using a one-way NDA I'm telling them I don't want them to share anything confidential.

One of the benefits of a mutual NDA is that since the terms bind both parties it's much less likely that they are unreasonable. In a one-way NDA the party drafting the NDA can make it as one-sided as they want. A mutual NDA creates a certain about of trust/goodwill between the parties. If you're going to use a one-way NDA it's worth explaining to the other party your intent so as to not start the relationship on the wrong foot.

answered Feb 5 '10 at 14:26
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Dane
1,866 points
  • Good point about showing good will with a Mutual NDA – Newyuppie 9 years ago

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