In some negotiation situations, one or both parties may require the counterparty to sign a nondisclosure agreement in advance of any projects they might do together. In this situation, both parties are taking a contractual risk, which means: one party might not honor the terms of this nondisclosure agreement one party might accept the first set of agreeable terms and sign the contract immediately the counterparty might have different private valuations for the value of the assets in the negotiation one party might use risky strategies at the bargaining table