What is an MDNA?
A mutual non-disclosure agreement (MNDA), or bilateral NDA, is an arrangement entered into by two parties where both are bound by confidentiality rules as set out in the terms of the agreement.
Typically this would prevent either party from disclosing or revealing any of the details, methods, ideas, or creative work involved in the discussion between the two parties.
MNDAs would normally be used for business discussions where the two parties do not know or inherently trust each other and revealing information could be damaging to either party.
MNDAs would often cover commercially sensitive information that would ideally not be revealed to either the public or an organization's competitors.
When Should an MNDA be Used?
A mutual non-disclosure agreement can be used for any business discussion or meeting where the details of which need to remain private. This could be during an acquisition, merger, or joint venture.
Mutual non-disclosure agreements are useful for new ideas or creations. This could be an invention that is being brought to market, a secret recipe within a food product that is not public knowledge, or the development of a new piece of software, video game, or work of fiction.
MNDAs are most useful and applicable when both parties are contributing information to the discussion which would need to remain secret.
For example, if two authors were working on a collaborative project such as writing a book, they may enter into a mutual non-disclosure agreement to prevent details from being leaked to the public or rival publishers such as plotlines, characters, and settings for the narrative.
What is the Difference Between an NDA and MNDA?
A non-disclosure agreement (NDA)is a general term covering agreements to maintain confidentiality of certain information, and typically NDAs are one-way, meaning one party is the discloser and the other is the recipient. A mutual non-disclosure agreement (MNDA) is an NDA with reciprocity; either party may disclose information to the other.
Using a Mutual Non-disclosure Agreement With International Partners—Whose Laws Apply?
There can be an added complication when entering into a mutual non-disclosure agreement with parties from overseas countries with different laws and legal proceedings.
For example, whose laws would apply when the agreement is made between a UK company and an organization based in the US or Australia? Companies insist on or negotiate to have the MNDA set out under the laws of their country of origin, wherever this may be.
Typically, as part of the agreement, both parties would agree on both the governing law and jurisdiction in which any matters would be settled.
The governing law simply means which country's laws would be used for the agreement. The jurisdiction is where the case will be heard in case of a dispute, or which courts would be used.
It should be noted that the governing law and jurisdiction would not necessarily be in the same place and tied to the same country.
For example, it may be agreed upon as part of the terms of the mutual NDA that the agreement would use UK law as the governing law, but in the case of a dispute, this may be heard in US courts.
This would mean US courts having the jurisdiction for the MNDA but working under UK law as the framework for the agreement.
How To Set Up a Mutual NDA | Top Tips for Creating a Mutual Non-disclosure Agreement
There are several important considerations when setting out a mutual non-disclosure agreement between yourself and another party. When entering into an MNDA you should always do the following
- Clearly describe which information needs to remain confidential
- Define the purpose of the information sharing between the two parties
- Assign a duration for the mutual NDA
- Define possible consequences for any breach of the mutual NDA
- Keep records of the information that is disclosed, who it came from, and its purpose
- Control access to confidential information so that only relevant individuals who need to know the details to carry out their role would be given the information
- Check the mutual NDA is being complied with at regular intervals
- Include a mechanism for the termination of the mutual NDA if necessary, with return or destruction of the information
- Use technology to your advantage
- Seek professional advice from experts in business law to ensure that the mutual NDA is watertight and best serves the interests of your organization
Contact Biztech Lawyers
If you would like more information on mutual non-disclosure agreements or are looking for help in setting up your own MNDA, get in touch with our contract law specialists today.
At Biztech, we have experts in contract and business law on hand to answer any query you may have.
We can go through your mutual NDA line by line and ensure that there is nothing missing from the document, that it serves your best interests, and that it fully aligns with the intended goals of your business or creative project.
If you have been asked to sign an MNDA but are not sure about the terms of the agreement or whether it would be beneficial in your situation, our contract lawyers can analyze any documents you have been presented with and explain what this means for your business, in plain simple English without any legal jargon or wooly answers.
It is always better to seek legal advice prior to signing, and to have the MNDA quickly checked by industry experts, rather than spend time and resources trying to settle a dispute in the courts.
For any matters related to mutual non-disclosure agreements and business contracts, our legal advisors provide business owners with the peace of mind and reassurance of knowing that the agreement they have entered into is fully legitimate and advantageous to their organization.
We are more than happy to share our years of industry experience and expert legal knowledge with business leaders or creative individuals who are looking to secure the maximum benefit from their mutual non-disclosure agreement.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.