Before Starting a Business Relationship
Last updated: 2021-07-09 (originally published on 2017-06-25) — by Alex Tanglao
If you are looking for potential business partners and will share your business ideas, ask them to sign a Confidentiality Agreement. Under such an agreement, they are legally bound not to disclose or discuss any confidential information to a third party and may use the information only for a specified reason. Use a one-way Confidentiality Agreement if only one business is sharing information or a two-way Confidentiality Agreement if both parties are revealing sensitive information.
A Letter of Intent, also called a Memorandum of Understanding (MOU), can help to set out the key terms of a potential agreement before you enter into a formally binding contract. A Letter of Intent (MOU) typically includes details of the proposed agreement, pre-conditions, key obligations, and intended signing date. This document is not legally binding, but it can contain certain legally binding clauses such as confidentiality.