Are electronic signatures valid?

Yes. Electronic signatures generally have the same legal effect as handwritten ones under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted, provided intent, consent, attribution, and record retention requirements are met.

How long should confidentiality last?

Choose a duration that reflects the sensitivity of the information. Two to five years is common for business information; trade secrets require indefinite protection while they remain secret.

Do NDAs need to be notarized?

Not typically. NDAs are private contracts and usually do not require notarization or witnesses, though notarization may add evidentiary value in some contexts.

What if confidential information is subpoenaed?

Include a legal-compulsion clause requiring notice when disclosure is compelled, and permit disclosure only to the extent legally required while seeking protective orders.

Can an NDA be mutual or one-way?

Yes. Mutual NDAs protect both parties' disclosures; one-way NDAs are appropriate when only one party shares confidential information during a transaction.

How do I revoke or terminate an NDA?

Termination depends on contract language. Include procedures for notice, return or destruction of materials, and survival of confidentiality obligations post-termination where needed.

Electronic Signature
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Non-Disclosure Agreement between Two Companies

Non-Disclosure Agreement between Two Companies

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

What the Non-Disclosure Agreement between Two Companies Is

A Non-Disclosure Agreement between Two Companies is a contract that defines confidential information to be shared between two business entities, establishes permitted uses, and sets limits on disclosure and retention. It can be mutual or one-way, and typically covers trade secrets, technical data, customer lists, pricing, and contract terms. NDAs set duration, remedies for breach, and governing law. When executed correctly, the agreement creates enforceable duties and helps protect competitive advantage while enabling collaboration, negotiations, or due diligence between corporate parties.

Why companies use an NDA between two companies

An NDA reduces commercial risk by creating enforceable confidentiality obligations, clarifying permitted disclosures, and enabling safe information exchange during negotiations, partnerships, or vendor selection.

Typical parties and roles that complete this NDA

Companies use NDAs at many stages: pre-sale talks, M&A diligence, joint development, and vendor onboarding.

Technology vendors sharing prototypes or source code with prospects during evaluation phases, where IP protection is essential.
Service providers exchanging client lists and pricing with partner firms before negotiating reseller or referral agreements.
Corporate development teams conducting diligence in potential acquisitions who require limited, time-bound access to confidential records.

Who can sign on behalf of a company

Authorized Officer

An executive officer (CEO, CFO, COO) or other corporate officer with delegated authority may sign. Confirm signatory authority through corporate bylaws or a board resolution to avoid enforceability disputes.

Delegated Signer

A named manager or agent with documented signature authority may execute NDAs. Maintain a record of delegation and include job title and capacity (e.g., 'Jane Smith, VP, signing on behalf of ABC Corp.').

Essential clauses to include in a professional NDA

A well-drafted NDA balances clarity and enforceability: define confidential information, limit use, set duration, describe exclusions, assign remedies, and select governing law.

Definition

Precise definition of 'Confidential Information' including examples and whether oral disclosures must be reduced to writing to qualify as confidential.

Purpose

A narrow permitted-use clause stating why information is shared, for example 'evaluation of a potential business relationship, and for no other purpose.'

Exceptions

Standard carve-outs such as public domain, independently developed information, previously known data, and information disclosed under legal compulsion.

Duration

Time-limited confidentiality obligations tied to a specific term or events; trade secrets may require indefinite protection while other data often uses 2–5 years.

Remedies

Injunctive relief, monetary damages, and recovery of attorneys' fees for breaches; consider specifying dispute resolution and venue to reduce uncertainty.

Return and Retention

Obligations to return or destroy materials, and rules for retaining copies for legal or compliance reasons, including required certifications of destruction.

Core information fields to gather

Party Names: Full legal entity names

Addresses: Street, city, state, ZIP

Effective Date: MM/DD/YYYY

Term Length: Years or event-based

Contact Points: Notice recipients and emails

Signature Blocks: Name, title, date

Step-by-step: filling out the NDA between two companies

Follow a clear sequence to reduce errors: prepare details, define confidentiality scope, assign signatories, and execute with required authentication.

01

Prepare details: Gather entity names, contacts, and the specific confidential materials.
02

Draft scope: Clearly list what is confidential and permissible uses.
03

Assign authority: Confirm the person signing has corporate signing authority.
04

Execute: Sign, date, and distribute executed copies to all parties.

How to set up an online signing workflow

Configure the digital workflow to match your review and approval steps, then apply authentication and retention settings before sending.

Field	Configuration
Signing Order	Sequential or parallel routing as needed
Authentication	Email link, SMS code, or advanced ID check
Attachments	Include exhibits and redaction instructions
Audit Trail	Enable detailed logging and completion certificate

Where to send the NDA and how execution typically flows

Execution often involves internal review, signatures, and distribution. Determine who receives the final fully executed copy and how it is archived.

Sender: Uploads the document and assigns signature fields
Internal Review: Legal or procurement reviews and approves terms
Signers: Designated signatories sign in agreed order
Distribution: All parties receive final signed PDF and audit log

Digital signing and technical requirements

Ensure the chosen system provides retention, export options, and an auditable certificate of completion to preserve enforceability and records.

File formats: PDF and DOCX supported
Authentication: Email, SMS, or advanced ID checks
Integrations: CRM, storage, and ERP integrations

Common mistakes to avoid when preparing an NDA

Using an overly broad definition of confidential information that captures public or unrelated data and invites disputes over scope.
Failing to name an effective duration or using ambiguous timeframes, which can lead to uncertainty about when obligations end.
Allowing oral disclosures without requiring written confirmation, making it difficult to prove what was protected and when.
Not verifying signatory authority or failing to record delegation, which can render execution ineffective or subject to challenge.

Penalties and legal risks of an incorrect or missing NDA

Monetary Damages: Compensatory and possibly punitive damages

Injunctive Relief: Courts can order disclosure to stop

Attorney Fees: Contract may shift fees to the prevailing party

Trade Secret Loss: Permanent competitive harm if secrets disclosed

Regulatory Exposure: HIPAA or other laws add fines

Contractual Breach: Termination rights in related agreements

eSignature vendor pricing and capabilities for NDA workflows

Compare common vendor starting prices and feature availability relevant to NDA execution. signNow appears first in the comparison per platform data.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes	Yes	Yes	Yes	Yes
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No envelope cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Real-world examples of NDAs between companies

These concise case patterns show how NDAs are used in common corporate scenarios.

M&A Diligence

A buyer requests proprietary financials for valuation

Mutual NDA signed before document exchange
The NDA limited use to diligence purposes, required return of documents, and included injunctive remedies to protect trade secrets.

Joint Development

Two firms evaluate a co-development opportunity for software APIs

Parties exchange technical specifications under a mutual NDA
Agreement specified IP ownership, outlined permitted use, and required destruction of shared code after project termination.

Practical tips for accurate and efficient NDA completion

Adopt consistent templates, verify signatory authority, and apply appropriate technical safeguards to reduce execution time and legal risk.

Use a concise template

Standardize clauses to minimize negotiation and avoid ambiguous language that can create enforcement issues.

Limit scope

Define confidential categories narrowly and tie duration to business needs to reduce future disputes.

Record authority

Document delegated signing authority and retain a copy with the executed agreement for audit purposes.

Keep audit trails

Preserve signature certificates, IP addresses, and timestamps to support enforcement if needed.

Frequently asked questions about NDAs between two companies

Answers to common legal and practical questions about drafting, signing, and enforcing NDAs in U.S. business contexts.

Need help? Contact support

Are electronic signatures valid?
Yes. Electronic signatures generally have the same legal effect as handwritten ones under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted, provided intent, consent, attribution, and record retention requirements are met.
How long should confidentiality last?
Choose a duration that reflects the sensitivity of the information. Two to five years is common for business information; trade secrets require indefinite protection while they remain secret.
Do NDAs need to be notarized?
Not typically. NDAs are private contracts and usually do not require notarization or witnesses, though notarization may add evidentiary value in some contexts.
What if confidential information is subpoenaed?
Include a legal-compulsion clause requiring notice when disclosure is compelled, and permit disclosure only to the extent legally required while seeking protective orders.
Can an NDA be mutual or one-way?
Yes. Mutual NDAs protect both parties' disclosures; one-way NDAs are appropriate when only one party shares confidential information during a transaction.
How do I revoke or terminate an NDA?
Termination depends on contract language. Include procedures for notice, return or destruction of materials, and survival of confidentiality obligations post-termination where needed.

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