Unilateral Non-Disclosure Agreement

A unilateral NDA is when one party is disclosing to at least one other party confidential information. The parties receiving the confidential information will keep the disclosed information private to uphold the contract. Information shared with a one-way NDA includes financial information, business plans, and other trade secrets.

Unilateral vs Mutual NDA

A unilateral NDA is different from a mutual NDA for one main reason; in a mutual non-disclosure agreement, both parties are sharing confidential information. All information shared with a mutual NDA is treated the same and both parties learning confidential information are legally bound to keep it confidential.

These agreements can be used in business dealings with mergers and acquisitions. In these business settings, both parties will need to disclose confidential information for the business plan to succeed. Another example where a mutual NDA can be used is for partnerships or joint ventures.

In times when a business venture or plan requires full cooperation from at least two parties, using a mutual NDA is beneficial. It ensures that confidential information is safe when sharing that information with a business partner.

When to Use a One-Way NDA

This nda template should be used when there is no need for two-way communication. Hiring a third party to manage data or meeting with investors. In these agreements, the information that the disclosing party reveals is confidential and the receiving party must keep it confidential.

Anytime that restricting or limiting information shared one-way is important, that is the time to use a unilateral NDA. That will keep information secure as you’re getting business advice or working with a third party.

A unilateral confidentiality agreement protects trade secrets that will be revealed while working with third parties. Confidential information can range from professional to private. Some information may be disclosed to the public in the future while other information may not. A non-disclosure agreement protects all of that.

For many businesses, having an NDA in place protects trade secrets. A Trade secret is a commercial secret that provides a business a competitive edge. Every business has trade secrets that they’re keeping confidential to help their business succeed. A trade secret can be as broad as business plans or as specific as a secret ingredient, as long as it’s confidential it counts.

A one-way NDA will define what the confidential information is and the obligations of the third party to keep it confidential. An NDA will also outline what can happen if there is a breach in contract and information is revealed.

When an NDA is not in use, it can make establishing that confidential information was revealed difficult. An NDA will also establish what the consequences will be for a breach of contract.

While having people sign a one-way NDA may seem demanding, it will help both parties involved. By defining confidential information and the obligations of both parties, it will be easier to keep the information a secret. It will also be easier to determine what the ramifications are for revealing trade secrets or other confidential information.

What to Include in a Unilateral Non-Disclosure Agreement?

An NDA sample will include the necessary information and format for a unilateral NDA to be legally binding and effective. It will help both parties know what they are agreeing to and define the important terms.

Confidential Information

To begin, the one-way disclosure agreement will define what confidential information means. This is information that the disclosing party is revealing to the third party. It includes any information that has not been made public. The agreement may have a stipulation about how confidential information is presented.

Exclusions

The agreement will also cover what are exceptions to confidential information. These exceptions include information that was public at the time of disclosure, discovered by the receiving party before the disclosure, or information learned through other means.

Obligations

Once the definitions of confidential information and exceptions have been established, the unilateral confidentiality agreement lays out the obligations of the receiving party. They agree to keep the disclosed information confidential and not to use that information for personal profit or benefit.

Term

If the NDA expires there will be a section for that as well. An agreement can be enforceable to a specific date or when certain conditions have been met. The conditions can be a written notice releasing from the NDA or when information ceases to be confidential. The date when the agreement expires should cover how long the information is expected to remain confidential.

Relationships

Relationships will also be defined in a unilateral confidentiality agreement. It will normally disclaim any relationship other than the defined one set in the contract.

Severability

This section of the unilateral NDA stipulates that if one aspect of the NDA is deemed by a court to be unenforceable, the rest of the contract remains in place.

Integration

This part of the agreement says that this is the final version of the agreement and that statements in the past cannot be relied on.

Waiver

This part of the contract grants the signers the right to complain about a violation of the NDA even if the complaint isn’t made promptly.

Injunctive Relief

This section covers if the NDA was broken, you can request the court to have the receiving party stop using your information.

Indemnity

Some unilateral confidentiality agreements have stipulations in place that if the receiving party breaks the contract, they are responsible for all damages for the disclosing party. This can range from lost profits to legal fees.

Many people signing an NDA may be opposed to signing an agreement that requires paying for lawyers and other legal fees because they may fear that it encourages litigation. The receiving party wants to protect themselves as well.

Governing Law

This is the state where the NDA will be enforced. It can be from any state even if you don’t live there or the contract wasn’t signed there.

Successors and Assigns

This section binds the company that acquires any party.

Signatures

The parties, or people with the proper authority, must sign and date the unilateral non-disclosure agreement for the contract to be enforceable. After signing and dating it is legally binding unless otherwise stated.

Having the right form and language in a unilateral NDA is important to ensure that all parties know what they are agreeing to. It will also help the agreement stand up in court if it is ever challenged. When protecting your confidential information and trade secrets you want everything to be covered.

Published: May 25, 2021