Last updated on February 3rd, 2020 at 06:16 am
There’s no one size fits all when it comes to NDAs. While there are two standard types of NDAs, finding the right one for your company’s needs is easier than you think. From document creation to delivering the final product for signatures, contract management software can help streamline the NDA process. Our helpful NDA management system guide can get you started. But it’s also important to know about different types of NDAs in the first place. No matter the intended goal of your project or partnership, using the right NDA is essential for a successful outcome.
Two Types of NDAs
When it comes to NDAs, there are two standard types used in most business partnerships: unilateral and mutual. Both are adaptable to the specific needs of your company.
- Unilateral NDAs: A unilateral NDA refers to an agreement submitted by one of the parties for another party to sign and accept. It protects the private information of one company by legally binding the other company to its terms and conditions.
- Mutual NDAs: A mutual NDA is just as it sounds, with private information shared by both parties. Each company plans to share confidential data that, if leaked, could cause harm to their business. A mutual NDA protects the best interests of everyone involved in order to move the business relationship to the next level.
Deciding which of the types of NDAs you need depends upon several factors. The good news is there is no need to reinvent the wheel each time you need a new NDA. Contract management software like ContraxAware comes with built-in templates that make the process easy. Not only do they save you time, but they also help improve workflow across departments. Say goodbye to multiple files and hello to easy access for your contracts, legal counsel, and IT departments.
When to Use an NDA
An NDA contract is valuable when you enter into a contract with someone outside your company. Large companies are quite familiar with both types of NDAs. But smaller start-ups might still be in the learning curve of what they are why they need them.
Sharing confidential information with a vendor or an independent contractor is risky. It can even be risky with your own employees. An NDA is a proactive document that establishes trust in the partnership. Your vendor or an independent contractor may cross paths with your competition at some point. The smallest slip of information on their part can greatly impact your business.
You may only need a unilateral NDA if you’re sharing information with an auditing or independent testing agency. You’re sharing business information, but the other side isn’t. However, it’s far more common to see mutual NDAs: both sides are pulling back the curtain, so both sides need protection.
NDAs are especially helpful when the partnership involves money. Whether you want to seek investors or want to sell your business, the financial information you share requires an NDA. Without one, you risk the loss of confidential information that may impact the outcome of your initial goal in a very negative way.
One of the most important components of an NDA is that of employees — both in your company and in the other company. Requiring those involved with your project to sign an NDA may offend some. They may feel you suspect they will steal your idea. By addressing the issue from the standpoint of due diligence and good governance, most business professionals will understand, appreciate, and sign your NDA.
How to Create Better Process Workflows
NDA contract management shouldn’t consume employee time. Employees dedicated to contract management as part of their duties can easily become overwhelmed. Juggling multiple contracts places everyone at risk for dropping an important ball at some point. Dropped balls containing confidential information can spell disaster for your business.
In a perfect business world, all departments work in harmony to deliver both types of NDAs in a timely manner. Today’s busy business world is anything but perfect, however, and that’s where contract management software can help.
ContraxAware is the ultimate collaborative tool when it comes to important contracts. From the beginning of an NDA document to the final stages, all team members involved in the project can contribute in an efficient way.
With more than 30 years of software development and business law experience, our leadership understands NDA management. If you have contract files here, there, and everywhere, let us help.
Our data mitigation specialists can help navigate your current files to our easy-to-use system. There are subscription plans for every level of business. You can even test ContraxAware with a free trial.
NDA management and process workflows don’t have to involve confusion and stress. By streamlining your contract management with ContraxAware, you can save time and improve your ROI. At ContraxAware, we offer support online and via phone. Built-in walkthrough style training makes learning the software a breeze.
Once you implement the system, on-screen prompts provide helpful reminders regarding the process of your contracts. These prompts also guide you to the next recommended steps, so you can create intuitive workflows around both types of NDAs. Don’t risk your company’s confidential information with just any contract software system. Learn more about how ContraxAware can help your company protect its best interests by reaching out to us today.