Mergers, acquisitions, joint ventures, and marketing tie-ups are some of the strategic moves that companies use to maintain their competitive edge, or simply to survive and remain profitable in today’s fast-paced business environment. When companies make such moves, this requires sharing of confidential information between them. This comes in the form of trade secrets, formulae, secret ingredients and recipes, programmed algorithms and other information. If any of this is disclosed to third parties or revealed to the general public, it can be detrimental to both parties.
The answer to making mergers, acquisitions, and joint ventures safe for the two parties is to sign a specific type of non-disclosure agreement: a mutual NDA. In this article, HRD America discusses important items about mutual non-disclosure agreements, such as its definition, features, and benefits.
A mutual NDA is a form of non-disclosure agreement, which can be called other names, such as mutual confidentiality agreement. The textbook definition of a mutual NDA is that it’s a legal document whose main purpose is to prevent at least two contracting parties from making any unauthorized disclosure of any sensitive information that the NDA deems relevant and confidential.
Yes! Both signatures of the contracting parties are required in a mutual NDA to signify that they have agreed to its terms and conditions. It also means that the parties agree to bind themselves to the terms, such as the effective time period, what constitutes a breach, and its consequences. The signatures are required to make the NDA legally binding, and this does not become binding or enforceable if only one of the parties signs it.
Yes, digital signatures are acceptable. In fact, some companies these days prefer to issue a digital NDA instead of one on paper. Note, however, that there are at least 3 conditions for a digital signature to be considered valid:
When it comes to the different types of NDAs, a digital NDA with a digital signature is as legally binding as the paper version. Digital signatures are in fact validated by law through the Electronic Signature in Global and National Commerce Act.
A unilateral NDA is one-sided and requires that only one party, the receiving party of the information, agrees to bind themselves to the NDA’s terms and conditions.
A mutual NDA is when two parties need to share confidential information with each other.
