Mutual Non-Disclosure Agreements

A mutual non-disclosure agreement, or a bilateral non-disclosure agreement, is similar to a one-way non-disclosure agreement with the difference being that both parties have an obligation to honor the contract to protect the agreed upon confidential information, whereas the one-way non-disclosure agreement only holds one party responsible for that obligation.  This contract is also created with the goal of restricting access to third parties.

Simply put, a bilateral agreement is created when both parties agree to hold obligations to perform or to provide. An example of a bilateral agreement in the form of a mutual non-disclosure agreement is one where Company A agrees to share its product prototype with Company B.  In turn, Company B will use the prototype in conjunction with its unique manufacturing process, a trade secret now disclosed to Company A, to mass-produce the product for Company A.  The transaction is completed and both companies are obligated to continue honoring the agreement by not replicating or sharing the others’ product or trade secret. 

These contracts are most often utilized in partnerships and business dealings such as mergers or joint ventures.  

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