Mutual NDA
What This Clause Does
A mutual NDA creates confidentiality obligations that run in both directions — you protect their information and they protect yours. This is the most equitable NDA structure and the one to aim for in any business relationship where you'll also be sharing sensitive information with the other party.
In practice, many companies present a one-sided NDA (protecting only their information) and call it a mutual NDA in the title. Read the actual obligations carefully to confirm both parties have the same restrictions, not just that the word "mutual" appears in the heading.
What This Looks Like in a Contract
"Each party (each as 'Disclosing Party' and 'Receiving Party') agrees to hold in confidence all Confidential Information received from the other party and to use such information only for the purposes of evaluating and engaging in the Proposed Transaction."
Red Flags to Watch For
- Titled 'Mutual' but only imposes obligations on one party
- No definition of what constitutes Confidential Information
- Extremely long term (10+ years or perpetual)
- No carve-out for information independently developed by the receiving party
Negotiation Strategies
Verify mutual obligations are truly symmetric — same definitions, same remedies
Limit the term to 2-3 years with a specific carve-out for trade secrets
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