It’s important to remember that the best way to keep something secret, is to keep it to yourself. So, always try to limit how much information is shared and with whom. When that can’t be done, an NDA is your next best protection.
Let’s start with the basics. What is a nondisclosure agreement (NDA)? Simply put, it is exactly what it sounds like — an agreement between parties to keep the information confidential.
So, what makes it mutual?
A mutual nondisclosure agreement is one where both parties share confidential information with the other, and each agrees to keep the other party’s information secret.
What goes into a mutual NDA?
- Clearly describe what information will be shared and will be considered confidential for each party. Explain what is NOT considered confidential information.
- Describe why the information is being shared and how the information may be used by the other party.
- Clearly state the length of the term of the agreement — and what must be done with the confidential information when the agreement terminates. Typically, it must be returned in a set timeframe, or if it cannot be returned, must be destroyed.
- Describe any limitations about what information can be shared and who it can be shared with — the parties should keep any necessary information sharing limited to a “needs to know” basis.
- Explain the parties’ rights if the other party breaches the agreement by disclosing or misusing confidential information.
- The obligation to maintain confidentiality should last beyond the term of the agreement and is only relieved in the event the information is rightfully and lawfully made public.
A mutual NDA can be a stand-alone agreement, or the common terms of a mutual NDA can be incorporated into a larger agreement.
Who needs a Mutual NDA?
- Consultants or Coaches of Coaches: Are you teaching someone how to do the very thing you do? Might they someday become your competitor? You want to promise them that any information they share with you is secure, but also that they won’t use the proprietary information (like workbooks, for example) that you have developed for your business for their own competitive business.
- Buying or selling a business? When parties are buying or selling a business, each party will likely need access to sensitive or otherwise secret information about the other as part of the due diligence.
- Group coaching agreements. All participants should be asked to sign something that states that they will not share or use for their own benefit any information shared by other participants in the group session — this allows for a more free exchange of ideas without concern of one attendee exploiting another’s proprietary or sensitive information for their own competitive advantage.
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