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Different Types of Nondisclosure Agreements

Jul 3, 2024 | Business of Law, Operating Your Company

Non-disclosure agreements (NDAs) are an important tool for many companies to safeguard confidential information from dissemination. Several different types of NDAs can be used, depending on the situation. For example, some business relationships might require a mutual agreement while in others, the two-way sharing of information is not necessary. In other cases, multiple parties may be involved in a transaction where confidential information will be disclosed. NDAs are not one-size-fits-all — they can be specifically tailored to meet the unique needs of a particular business engagement.

Unilateral NDAs

One-sided NDAs are commonly called “Unilateral NDAs.” They allow one party to limit how another party shares its confidential information. These types of NDAs are used whenever a company must disclose sensitive information to employees, clients, partners, investors, and advisors. Examples of one-sided NDAs can include:

  • Employer-employee NDAs — Employers often use these NDAs to restrict employees from disseminating confidential information such as trade secrets, pricing data, operation plans, customer lists, and technical information.        
  • Company-contractor NDAs — Companies can use NDAs to prohibit contractors from sharing certain information they learn while working with the company that could adversely impact the competitiveness of the business. 
  • Inventor-evaluator NDAs — Inventors can use NDAs to protect their inventions from being used by an evaluator or disclosing information about business operations, customer information, accounting information, and intellectual property. 
  • Seller-buyer NDAs — Sellers can use NDAs to limit buyers from sharing information they were exposed to during the sale of goods or services, including information about business operations, production processes, intellectual property, and computer technology. 

A one-sided NDA is a straightforward way of safeguarding sensitive information when only one party is sharing confidential data. However, in other types of business relationships, both parties might need to share information — and a mutual NDA may make more sense.    

Mutual NDAs

A mutual NDA, also called a bilateral NDA, requires that parties disclose confidential information to each other. These types of NDAs are commonly used when businesses share sensitive data during negotiations. It allows both parties to move forward to achieve a common goal without concern that the information discussed will be distributed to third parties. Mutual NDAs are commonly used in situations involving corporate takeovers, joint ventures, and mergers and acquisitions. They may also be useful where a party might be hesitant to sign a one-sided agreement.   

Multilateral NDAs

A multilateral NDA involves three or more parties where at least one will disclose information to the others. Typically, a multilateral NDA eliminates the need for entering into separate one-sided or mutual NDAs between the parties. Multilateral NDAs are often used in complex deals that require an extensive amount of negotiation. They can also be used where a consortium of companies that each have their own confidential technologies collaborate on a large-scale project — or where multiple investors participate in funding a startup. 

Contact an Experienced New York Business Attorney

It’s important to make sure an NDA is tailored to the specific circumstances surrounding a transaction to protect your company’s confidential information. If you are uncertain which type of NDA is best, it’s best to consult with an experienced business attorney who can advise you regarding the NDA you need. Offering reliable counsel for a broad scope of business matters, Brinen & Associates will assist businesses and corporate owners with drafting, negotiating, litigating, and enforcing non-disclosure agreements. Call (212) 330-8151 or send us a message to learn more about how we can help you. 


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I formerly worked as a satellite employee from my home state of New Jersey. I ended my employment with my former employer in 2016. In 2018, I was sued by my former employer for $1.1 million in Illinois State Court. I was referred to Brinen & Associates, LLC by a friend who is a client of the firm. Brinen & Associates, LLC came highly recommended. I contacted Joshua Brinen and then had a consultation at his office with his colleague Mark White. Together, Messrs. Brinen and White explained my options...

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