Mutual NDA Overview
Mutual Non-disclosure Agreements (NDAs), or confidentiality agreements, are a common form of business contract. Their purpose is to protect the confidentiality of any sensitive information exchanged between the two parties.
For prospective business, these agreements need to balance protecting each party’s sensitive information with the needs to facilitate these early-stage exploratory discussions.
NDA’s that request indemnification and monetary protections for losses (both direct and indirect financial damages) are not a standard practice. These terms create onerous liabilities with potentially unlimited monetary claims while also disincentivizing the disclosing party from taking reasonable steps to mitigate its losses.
These terms are a steep burden to incur before even executing a business agreement. In contrast, the absence of indemnification does not prevent the disclosing party from claiming injunctive reliefs, which are a reasonable and appropriate protection.
As part of our standard business practice, Datatel does not accept indemnification clauses in NDAs intended for exploratory discussions. These initial conversations are not intended to include the disclosure of highly sensitive or proprietary information, nor do they warrant the legal complexity or liability implications that indemnification provisions introduce.
Information to Share
To ensure clarity and mutual understanding, we respectfully request that only the following types of low-risk confidential and non-sensitive information be shared during exploratory sales discussions:
- High-level overview of your solution goals and priorities (e.g., what do we need to solve)
- High-level overview of current payment workflows and connected systems (e.g., how your payment ecosystem works today)
- Desired application features and results (e.g., automation preferences, reporting needs)
- Desired application payments use cases, workflows and data exchange processes
- Descriptions of third-party systems integration requirements (published API specifications)
- Estimated Payment Transaction Volume (e.g., the payment application’s expected traffic)
- General budget ranges and timelines
- Publicly available company information (e.g., from your website or investor relations materials)
We advise against sharing the following sensitive information during pre-engagement discussions:
- Trade secrets, proprietary algorithms or other valuable intellectual property
- Detailed private network security architecture diagrams, technical specs or Login credentials
- Third party vendor/customer contract terms, pricing, or proprietary technology
- Personally identifiable customer information (PII) or other such privacy data (e.g. HIPAA)
- Confidential customer or partner lists
- Internal/non-public financial data or forecasts
- Unreleased product roadmaps or legal documents
