What is a mutual NDA and how does it differ from a one-way NDA?

A mutual NDA (also called a bilateral or two-way NDA) is a confidentiality agreement where both parties agree to protect each other's confidential information. Either party may share sensitive information with the other, and both are equally bound to keep it secret. A one-way (unilateral) NDA only protects information flowing in one direction — for example, an employer protecting trade secrets disclosed to an employee. Use a mutual NDA when both parties will share sensitive information with each other, such as in a business partnership discussion, pre-acquisition due diligence, or joint venture exploration.

How long should a mutual NDA last?

Most mutual NDAs have a term of 1–3 years from the date of signing. Two years is the most common duration for general business and partnership discussions. For technology or startup contexts (where IP has a longer value window), 3 years is appropriate. Some NDAs distinguish between the agreement's term (when it can be terminated) and the confidentiality obligations' survival period (how long after termination the confidentiality duty continues — often 2–5 years beyond termination). This template includes both provisions, which you can customise.

Is a mutual NDA legally binding?

Yes. A mutual NDA is legally binding once signed by both parties, provided it contains the essential elements of a contract: offer, acceptance, consideration (the mutual exchange of confidentiality obligations counts as consideration in most jurisdictions), and sufficient certainty of terms. Both parties must have the legal capacity to enter into contracts. This template is jurisdiction-neutral and works in most common law countries. For cross-border NDAs or high-value transactions, specify the governing law in Clause 9 and consult a local attorney.

Can we share confidential information with employees or advisors?

Yes, under the 'permitted disclosures' clause — but only on a strict need-to-know basis, and only to employees, contractors or professional advisors (lawyers, accountants) who are themselves bound by confidentiality obligations. The receiving party remains responsible for any breach by their employees or advisors. Confidential information should not be shared more widely than is necessary for the specific purpose stated in the NDA.

Can confidential information be entered into AI tools like ChatGPT?

No — and this is a critical 2026 risk that most older NDA templates fail to address. When confidential information is entered into a public AI tool (ChatGPT, Gemini, Copilot, etc.), that data may be used to train future models or appear in responses to other users. This constitutes a disclosure of confidential information and would breach the NDA. This template includes a specific AI tools prohibition clause: neither party may enter, upload or use confidential information as input to any third-party AI system without prior written consent from the disclosing party.

Updated June 2026

Free Mutual NDA Template

Q: What information should be excluded from an NDA?

Four standard exclusions must be in every NDA to make it enforceable: (1) information already in the public domain through no fault of the receiving party; (2) information the receiving party already knew before signing, evidenced by their own records; (3) information independently developed by the receiving party without using the disclosing party's information; (4) information required to be disclosed by law, court order or regulatory authority. Without these exclusions, the NDA is overly broad and may be unenforceable. This template includes all four standard exclusions in Clause 3.

A bilateral non-disclosure agreement where both parties' confidential information is equally protected. Includes exclusions clause, AI tools prohibition and injunctive relief.

Party A ↔ Party B Both parties protected equally

Business partnerships Startup fundraising Pre-acquisition talks Joint ventures Freelancer + client Technical collaboration

Written & maintained by Marcus Aius, founder of ContractDraft

Not legal advice. This template is general information, not a substitute for a lawyer. For high-value or complex contracts, have a qualified attorney review the final document before signing.

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1 — Agreement Details

Effective Date

Purpose of the NDA

2 — Party A

Full Name / Company

Address (optional)

Signatory Title (optional)

3 — Party B

Full Name / Company

Address (optional)

Signatory Title (optional)

4 — Duration

Agreement Term

Confidentiality Survival Period

5 — Governing Law

Governing Law

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Mutual Non-Disclosure Agreement

Effective date: enter date above

1. Parties and Purpose

This Mutual Non-Disclosure Agreement ("Agreement") is entered into as of enter date above between Party A name, ("Party A") and Party B name, ("Party B") (together, the "Parties").

The Parties wish to explore the Purpose and may need to share confidential information with each other in connection with that Purpose. Each Party will act both as a Disclosing Party and as a Receiving Party. This Agreement governs the treatment of Confidential Information exchanged between the Parties for the Purpose only.

2. Definition of Confidential Information

"Confidential Information" means any information disclosed by one Party to the other, whether orally, in writing or electronically, that is designated as confidential or that a reasonable person would understand to be confidential given the nature of the information and circumstances of disclosure. This includes but is not limited to: business plans, financial projections, technical specifications, source code, customer and supplier lists, pricing, trade secrets, investment terms, cap tables, marketing strategies and personnel information.

3. Exclusions from Confidentiality

The confidentiality obligations do not apply to information that: (a) is or becomes publicly available through no act of the Receiving Party; (b) was already known to the Receiving Party before disclosure; (c) is independently developed by the Receiving Party without use of the Confidential Information; (d) is lawfully received from a third party without restriction; or (e) is required to be disclosed by law or court order, provided the Receiving Party gives prior written notice where legally permissible.

4. Duration of Agreement

This Agreement comes into effect on the date of signing and continues for 2 years. Confidentiality obligations survive termination of this Agreement for a further 2 years after the end of the Agreement term.

5. Obligations of Each Party

Each Receiving Party will: (a) keep the Disclosing Party's Confidential Information strictly confidential; (b) use it solely for the Purpose; (c) not disclose it to any third party without prior written consent; and (d) apply at least the same degree of care it uses for its own confidential information, and no less than reasonable care.

6. Permitted Disclosures

Each Party may disclose Confidential Information on a strict need-to-know basis to its employees, contractors and professional advisors (lawyers, accountants, financial advisors) who are bound by equivalent confidentiality obligations. Each Party remains responsible for any breach by its employees or advisors.

7. AI Tools Prohibition

Neither Party may enter, upload, paste or otherwise use any Confidential Information as input to any third-party artificial intelligence or machine learning system (including but not limited to ChatGPT, Gemini, Copilot, Claude, or similar tools) without prior written consent from the Disclosing Party. This applies to all uses including summarisation, translation, analysis and drafting.

8. Return or Destruction of Information

On written request by the Disclosing Party, or on termination of this Agreement, the Receiving Party will promptly return or permanently destroy all Confidential Information (including copies and derivatives) and confirm in writing that it has done so, unless retention is required by law.

9. No Licence Granted and Injunctive Relief

Nothing in this Agreement grants any licence, right or interest in any intellectual property of the Disclosing Party. Each Party acknowledges that a breach may cause irreparable harm for which monetary damages would be inadequate, and that the non-breaching Party is entitled to seek injunctive or other equitable relief in addition to any other available remedies.

10. General Provisions and Governing Law

This Agreement constitutes the entire agreement between the Parties regarding confidentiality of the disclosed information and supersedes all prior discussions. Any amendment must be in writing and signed by both Parties. If any provision is unenforceable, the remainder continues in full force.

Governing law: governing jurisdiction. Any disputes arising from this Agreement will be resolved in the courts of that jurisdiction.

Party A

Signature

Print name: _______________

Title: _______________

Date: ___________________________

Party B

Signature

Print name: _______________

Title: _______________

Date: ___________________________

Template preview

Mutual Non-Disclosure Agreement Free to download

Parties & Purpose

1. Parties and Purpose

This Mutual Non-Disclosure Agreement ("Agreement") is entered into as of [Date] between [Full Name or Company Name] ("Party A") and [Full Name or Company Name] ("Party B") (together, the "Parties").

The Parties wish to explore a potential [e.g. business partnership / joint venture / investment / commercial transaction / collaboration] (the "Purpose") and may need to share confidential information with each other in connection with that Purpose. Each Party will act both as a Disclosing Party (when sharing information) and as a Receiving Party (when receiving information).

This Agreement governs the treatment of Confidential Information exchanged between the Parties in connection with the Purpose only.

Confidential Information

2. Definition of Confidential Information

"Confidential Information" means any information disclosed by one Party to the other, whether orally, in writing, electronically or in any other form, that is designated as confidential or that a reasonable person would understand to be confidential given the nature of the information and the circumstances of disclosure. This includes, but is not limited to:

Business plans, strategies and financial projections Technical specifications, source code and algorithms Customer and supplier lists and contact data Pricing, margins and commercial terms Trade secrets and pending patent applications Investment terms, cap tables and equity structure Marketing strategies and competitive intelligence Personnel information and internal communications

Exclusions

3. Exclusions from Confidentiality

The confidentiality obligations in this Agreement do not apply to information that:

✗ The following is NOT confidential under this Agreement

✗Is or becomes publicly available through no act or omission of the Receiving Party

✗Was already known to the Receiving Party before disclosure, evidenced by prior written records

✗Is independently developed by the Receiving Party without use of or reference to the Confidential Information

✗Is lawfully received from a third party who is not bound by any confidentiality restriction regarding that information

✗Is required to be disclosed by law, court order or regulatory authority — provided the Receiving Party gives the Disclosing Party prior written notice where legally permissible

Duration

4. Duration of Agreement

This Agreement comes into effect on the date of signing and continues for (select one):

1 year 2 years 3 years Custom: [specify]

Confidentiality obligations survive termination of this Agreement for a further [e.g. 2 years] after the end of the Agreement term. The survival period should be specified regardless of the Agreement's primary duration.

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What's included in this template

Parties, purpose and bilateral protection structure

Definition of confidential information (8-category checklist)

Exclusions from confidentiality (5 standard exclusions)

Duration — 1, 2 or 3 years with configurable survival period

Obligations of each party as receiving party

Permitted disclosures (employees and advisors on need-to-know basis)

AI tools prohibition — no feeding confidential data to AI systems

Return or destruction of confidential information on termination

No licence granted — receiving information ≠ right to use it

Injunctive relief clause + governing law + signature block

How to use this template

Identify the Purpose clearly in Clause 1

The NDA should protect information shared for a specific, defined purpose — not "any business reason, ever." Write the Purpose specifically: "exploring a potential marketing services partnership" or "evaluating a potential acquisition of Party B." A narrowly defined purpose limits the scope and makes the NDA more enforceable.

Keep all 5 exclusions in Clause 3 — do not remove them

The exclusions clause protects both parties from unenforceable overreach. An NDA that claims to protect information already in the public domain, or that was independently developed, will not hold up in court. Do not remove the standard exclusions — they are there to make the agreement legally sound, not to weaken your protection.

Set the duration and survival period separately

Two years is the standard NDA term for most business discussions. Set the survival period (how long confidentiality continues after the agreement ends) to at least 2 years beyond the agreement term. For highly sensitive information — trade secrets, source code, cap tables — consider a longer survival period or make specific categories survive indefinitely.

Include the AI tools prohibition before sharing any data

This is the most 2026-critical clause in any NDA. Before you or the other party share any confidential information, ensure the AI tools prohibition clause is in place and both parties understand it. Entering business plans, financial projections, or technical specifications into ChatGPT, Gemini or any other public AI model constitutes a disclosure and may void your NDA protections for that information.

⚠ The AI tools clause is the most important update to NDA practice in 2026. Most NDA templates written before 2023 have no provision for AI disclosure. If a party enters your confidential information into a public large language model, that data may surface in responses to other users — permanently and irreversibly. This clause requires written consent before any confidential information is used as input to a third-party AI system. Do not skip it.

2026 optional clauses to consider

AI 2026 AI tools prohibition is already included in the full template. Consider extending it to prohibit AI-assisted analysis of confidential data (e.g. using AI to summarise confidential documents) unless the AI system is privately hosted with no data retention — such as enterprise versions of Claude or GPT-4.

No-Hire Add a mutual non-solicitation / no-hire clause: neither party will solicit or hire the other's employees during the NDA term and for 12 months after. Common in M&A discussions and joint ventures where teams may meet.

Digital Security Require confidential information to be stored in encrypted formats, transmitted only via secure channels (not plain-text email), and deleted from shared drives within 30 days of the Purpose concluding. Adds a practical security layer beyond the legal obligation.

Frequently asked questions

: A mutual NDA (also called bilateral or two-way) is a confidentiality agreement where both parties agree to protect each other's information. Either party may share sensitive information with the other, and both are equally bound to keep it confidential. A one-way (unilateral) NDA only protects information flowing in one direction — for example, protecting a company's trade secrets when shared with a new employee.

Use a mutual NDA when both parties will be sharing sensitive information — such as in a partnership discussion, joint venture, pre-acquisition due diligence, or any collaboration where both sides need to disclose proprietary information.
: Two years is the most common duration for general business NDAs covering partnership discussions and commercial negotiations. For technology companies or startups sharing IP and source code, 3 years is appropriate. For very sensitive information — trade secrets, unreleased product plans, cap tables — consider a longer survival period or make those specific categories survive indefinitely after the agreement ends.

Always set both the agreement term and the survival period separately: the survival period (how long confidentiality continues after the NDA expires) should be at least as long as the agreement itself.
: Five standard exclusions must be in every NDA to make it legally sound: (1) information already in the public domain through no fault of the receiving party; (2) information the receiving party already knew before signing, evidenced by their own prior records; (3) information independently developed by the receiving party without using the disclosed information; (4) information lawfully received from a third party without confidentiality restrictions; (5) information required to be disclosed by law or court order.

Do not remove these exclusions — they are not there to weaken your protection. They are there to ensure the NDA is enforceable. An NDA without standard exclusions may be challenged in court and struck down entirely.
: Yes. When properly signed by both parties, a mutual NDA is legally binding. The mutual exchange of confidentiality obligations constitutes sufficient consideration in most jurisdictions — neither party needs to pay money for the NDA to be enforceable. Both parties must have legal capacity (be of legal age and sound mind) to enter into contracts.

This template is jurisdiction-neutral and works as a starting point in most common law countries (US, UK, Australia, Canada, etc.). For high-value transactions, cross-border agreements, or situations involving trade secrets under specific laws (e.g. the US Defend Trade Secrets Act), a local attorney should review the final version.
: Yes — but only on a strict need-to-know basis, and only to employees, contractors or professional advisors (lawyers, accountants) who are themselves bound by equivalent confidentiality obligations. The receiving party remains responsible for any breach by their employees or advisors — if an employee leaks confidential information, the party that shared it with them is liable under the NDA.

Confidential information should never be shared more widely than is necessary for the specific Purpose stated in the agreement. Keep a record of who receives it internally.
: No — and this is one of the most critical 2026 NDA issues that older templates fail to address. When confidential information is entered into a public AI tool (ChatGPT, Gemini, Copilot, etc.), that data may be used to train future model versions or appear in responses to other users. This is a disclosure of confidential information and would breach the NDA.

This template includes a specific AI tools prohibition clause: neither party may enter, upload, paste or otherwise use confidential information as input to any third-party AI or machine learning system without prior written consent from the disclosing party. This applies to summarisation, translation, analysis or any other use. The only exception is a privately hosted AI system with no data retention or sharing.