Non-disclosure agreements come in two basic shapes: unilateral, where only one party is sharing confidential information, and mutual, where both sides are. Using the wrong one is a common and avoidable mistake.
Unilateral NDAs: one-way protection
A unilateral NDA fits situations where only one party is disclosing sensitive information — a company sharing product details with a potential vendor, for example. Only the disclosing party's information is protected.
Mutual NDAs: both sides at risk, both sides covered
When two companies are exploring a partnership, merger, or joint venture, both sides typically share sensitive information — which calls for a mutual NDA protecting both parties' disclosures equally.
The scope of 'confidential' still needs defining
Regardless of direction, an NDA needs a clear definition of what counts as confidential, how long the obligation lasts, and what's explicitly excluded (information already public, independently developed, or already known).
Getting the direction wrong has real consequences
Signing a unilateral NDA when you're also sharing sensitive information leaves your own disclosures unprotected — a mismatch that's easy to miss when an NDA gets signed quickly at the start of a deal.