Confidentiality agreement
…. Alias
- Confidentiality agreement
- (Mutual) Non-Disclosure Agreement
A non-disclosure agreement or NDA is also known as a confidentiality agreement. This is an agreement specifically designed to protect the confidential information of one party or of both parties, or more than one party, and to ensure that such information is not in the public domain. This information often concerns intellectual property, trade secrets, professional secrecy or other confidential information.
Confidentiality agreements are generally agreed when two companies, individuals or other entities (such as partnerships, associations, etc.) are considering doing business and need to understand the processes used in each other’s company to evaluate the potential business relationship. NDAs may be “mutual”, which means that both parties must keep the other party’s information confidential, or they may restrict the use of material by a single party. An employee may be required to sign a confidentiality agreement with an employer in order to protect business secrets. Also in the case of litigation settlements, the parties often agree a confidentiality agreement with regard to the terms of the settlement.
A unilateral or one-way NDA involves two parties, with only one party requiring the shared information to remain confidential. With this type of agreement, it is good to know that if you sign a unilateral NDA that contains confidentiality obligations for you as a company, this confidentiality does not apply to the information that your company has shared with the other party. Usually it is better to ask for a mutual NDA in that case.
Mutual NDA
The mutual NDA is also called bilateral or two-way NDA. A mutual NDA involves two parties where both parties expect to share information with each other that should be kept confidential. If more than two parties share confidential information with each other, this can be done by concluding a bilateral NDA for each relationship. It is likely to be more convenient to set up a multilateral NDA with the same rights and obligations for all parties involved.
In addition to the usual parts that are included in most agreements, it is important for the NDA to pay attention to matters such as what exactly confidentiality entails and which items are covered and which are not, liability (usually with a distinction between direct and indirect damage despite the fact that Dutch law does not know these terms), duration, penalties and choice of law.
