How to Draft a Mutual NDA: Step-by-Step

A mutual NDA is a contract in which two parties agree to keep each other’s confidential information private. To draft one, start from a template that defines confidential information, sets the purpose and term, lists exclusions, and states governing law. Fill those sections with your facts, format the document for signature, and have a lawyer review before anyone signs if the deal is material. You can start with the NDA Generator to produce a first draft locally in your browser, then edit the output.

Start from a mutual template, not a one-way NDA

A one-way NDA protects only the disclosing party. A mutual NDA protects both sides, which is what you want when each party will share information, such as in a joint venture, a vendor evaluation, or early partnership talks. Using a one-way template and adding “mutual” in the title creates inconsistencies: the obligations, the exclusions, and the term may still be written for one direction only.

Gather these facts before you open any tool:

• Legal names and entity types of both parties, plus addresses for notices.
• The purpose: one sentence describing why information is being exchanged.
• What counts as confidential: mark documents, oral disclosures confirmed in writing within a set number of days, and anything a reasonable person would treat as confidential.
• The term of the agreement and how long confidentiality survives after it ends.
• Exclusions: information already public, independently developed, received from a third party without duty, or required to be disclosed by law.
• Governing law and venue.
• Whether either side needs to name affiliates or representatives who can receive information.

Fill in the blanks in the right order

The order matters because later clauses depend on earlier choices. Work through the document in this sequence:

1. Parties and recitals. Use the full legal name, not a trade name. If an affiliate will receive information, define “Representatives” or “Affiliates” and say they are bound by the same terms.
2. Definition of confidential information. Keep it broad but specific enough to be workable. A common structure is: information marked confidential at disclosure, plus oral information confirmed in writing within a short window (often 10 to 30 days), plus information that a reasonable person would understand to be confidential given the circumstances.
3. Purpose. Write one sentence. Broad purposes make it harder to argue later that a use fell outside the agreement.
4. Obligations. State the standard of care: use at least reasonable care, limit access to those who need to know, and do not use the information for any purpose other than the stated one.
5. Exclusions. List them plainly. Do not rely on a generic “standard exclusions” phrase if the template does not spell them out.
6. Term and survival. Set an end date or a fixed number of years, and state how long the confidentiality obligation continues after termination.
7. Return or destruction. Say what happens to copies, including backups, and whether a retained copy is allowed for legal or compliance reasons.
8. Remedies, governing law, and signature blocks. Leave the remedies clause as written unless a lawyer advises otherwise; changing it can shift the risk balance.

Once the draft is complete, export it to PDF before sending. That fixes the layout and prevents accidental edits by the other side. If you need to combine the signed NDA with exhibits, use Merge PDF so the package stays in one file with consistent page numbers.

Formatting expectations before anyone signs

Courts and counterparties expect a clean, consistent document. These are formatting checks, not legal ones:

• Page numbers on every page after the first, in the same position.
• A footer or header identifying the agreement and the parties, so detached pages can be matched.
• Signature blocks that match the party names exactly as written in the first paragraph.
• Initial blocks on each page if the agreement is long or if the other side asks for them.
• Consistent defined terms: if you define “Confidential Information” with capitals in section 1, do not switch to lower case in section 4.
• No tracked changes in the version you send for signature. Accept or reject all changes first, then export to PDF.

If the other side sends comments in a separate document, resolve them in the body and send back a clean version plus a redline. Keeping two versions straight is easier when the file names follow a pattern, such as Mutual-NDA_clean_2025-06-01.pdf and Mutual-NDA_redline_2025-06-01.pdf.

What the document must cover, and what breaks when it does not

The table below lists the sections a mutual NDA needs, the practical range for each, and what fails when the section is missing or vague. Ranges are drafting conventions, not legal requirements; your governing law and the deal size determine what is appropriate.

When this does not apply

A mutual NDA is the wrong instrument in several common situations:

• Only one side is disclosing information. Use a one-way NDA instead. A mutual NDA creates obligations on the disclosing party that may never be triggered.
• The exchange is a standard purchase of goods or services with no sensitive information. A confidentiality clause in the main contract is usually enough.
• A statute or regulation requires a specific form of confidentiality agreement, such as certain healthcare or government contracting contexts. Use the mandated form.
• The other side has already sent its own NDA on its paper. You can still draft your own version for comparison, but signing their document is a separate decision that needs review.
• The information is a trade secret you intend to enforce as such. Trade secret protection has its own requirements; an NDA alone may not be enough.

This article does not give legal advice and does not interpret any contract. It describes a drafting workflow. Whether a specific NDA is enforceable, and whether its terms fit your jurisdiction, is a question for a lawyer licensed there.

Where a lawyer still has to look at it

Drafting the document is the mechanical part. A lawyer should review before signature when any of the following is true:

• The information is a trade secret or core to your business.
• The other party is a competitor or a potential acquirer.
• The agreement has a non-solicit, non-compete, or standstill clause attached.
• The term is longer than a few years or the survival period is open-ended.
• The governing law is a jurisdiction where you do not normally do business.
• The other side has proposed changes to remedies, indemnity, or the definition of confidential information.
• The deal value is material enough that a dispute would hurt.

A lawyer’s review is also where you find out that a clause you copied from another contract does not fit your facts. That is the point of review: not to rewrite the whole document, but to catch the one term that changes the risk.

After the NDA is signed, keep the executed PDF and the redline together. If you need to count the words in a cover note or check a paragraph against a word limit, the Word Counter runs in the browser and does not upload the text.

FAQ

what is a mutual nda

A mutual NDA, also called a bilateral NDA, is a confidentiality agreement in which both parties agree to protect each other’s confidential information. It is used when information flows both ways, unlike a one-way NDA where only one party discloses.

can i draft a mutual nda myself

You can draft a mutual NDA from a template if the exchange is routine. Fill in the parties, purpose, definition of confidential information, term, and governing law. Have a lawyer review it before signing if the information is sensitive, the other party is a competitor, or the deal value is material.

how long should a mutual nda last

There is no fixed rule. Common drafting ranges are a term of 1 to 5 years with a survival period of 1 to 5 years after termination. The right length depends on the deal and your jurisdiction, so confirm with a lawyer if the term is longer than a few years.

does a mutual nda need to be notarized

Usually not. Most mutual NDAs are signed by authorized representatives without notarization. Some jurisdictions or specific contexts may require additional formalities; that is a question for a local lawyer, not something a template can settle.