# Non-Disclosure Agreement for Business Discussions: Mutual or One-Way?

## Start with who will disclose information

A unilateral NDA protects information disclosed primarily by one party. A mutual NDA imposes confidentiality obligations on both parties. The correct choice depends on the actual exchange of information, not which template is easiest to obtain.

## Define confidential information realistically

An NDA can cover written, oral, electronic, and observed information, but definitions that cover everything without limits can be difficult to administer. Specify exclusions for information already known, publicly available, independently developed, or lawfully received from another source.

## Limit use as well as disclosure

A recipient may need to use information solely to evaluate a transaction, vendor relationship, or partnership. State the permitted purpose, who may receive the information, and the standard of care required. Employees and advisers often need access subject to appropriate confidentiality duties.

## Address duration and return obligations

Consider how long confidentiality survives and whether trade secrets receive different treatment. Provide workable rules for returning or deleting materials, including backup systems and legally required retention.

## Watch for hidden commercial restrictions

Some NDAs contain non-solicitation, non-circumvention, standstill, exclusivity, or intellectual-property provisions. These may materially change the parties’ rights and should not be treated as routine confidentiality terms. California restrictions on competition require particular care.

## Use the NDA as one part of a diligence process

For M&A or investment discussions, staged disclosures, clean teams, and controlled data rooms may be appropriate. An NDA cannot eliminate every risk of misuse, so the timing and scope of disclosure matter as much as the document itself.

## When should you consult a California business attorney?

Consider obtaining legal advice before signing, issuing a formal notice, accepting investment funds, or committing to a transaction structure. The appropriate approach depends on the documents, the parties’ leverage, and the specific facts. Alex Nahai Law assists businesses with contract, corporate, financing, and transaction matters. Contact the firm to discuss your circumstances.

*This article is provided for general informational purposes only and does not constitute legal advice or create an attorney-client relationship.*