NDA Review Guide
Understand what you're agreeing to keep secret — and what you're giving up
Non-Disclosure Agreements (NDAs) are among the most common contracts freelancers, employees, and business partners sign. While NDAs serve a legitimate purpose — protecting trade secrets and confidential business information — they can also be used to silence you, restrict your career, or expose you to disproportionate liability. Most people sign NDAs without reading them carefully.
Common Red Flags
Overly broad definition of "Confidential Information"
If everything is confidential — including publicly available information — you could be liable for discussing things everyone already knows. Look for reasonable carve-outs.
No expiration date
Perpetual NDAs bind you forever. Most legitimate NDAs have a 2-5 year term. Trade secrets may warrant longer protection, but general business information should not.
One-sided (unilateral) when it should be mutual
If you're also sharing sensitive information (your methods, pricing, client lists), the NDA should protect both parties. Push for mutual NDAs in business partnerships.
Broad non-solicitation or non-compete embedded in the NDA
Some NDAs sneak in non-compete clauses disguised as confidentiality protections. Read carefully for restrictions on who you can work with or what industries you can operate in.
Unlimited liability for breach
NDAs that don't cap damages expose you to potentially catastrophic liability. Look for a damages cap proportional to the relationship.
No exceptions for legally compelled disclosure
You should always be able to disclose information when required by law, court order, or regulatory investigation. This exception should be explicit.
Must-Have Clauses
Definition of Confidential Information
Specific categories of information that are protected, with clear exclusions for public knowledge, independently developed information, and prior knowledge.
Term and duration
When the NDA starts, how long confidentiality obligations last, and what happens to confidential materials upon expiration.
Permitted disclosures
Who you can share information with (e.g., your attorney, accountant) and under what circumstances.
Return/destruction of materials
What happens to confidential documents and data when the NDA expires or the relationship ends.
Remedies for breach
What happens if either party breaches the NDA. Should include a cap on damages and specify whether injunctive relief is available.
Governing law and jurisdiction
Which state's laws govern the agreement and where disputes will be resolved.
Negotiation Tips
- If an NDA is presented as "standard" or "non-negotiable," that's a yellow flag. Every contract is negotiable.
- Request a mutual NDA if you're sharing any proprietary information — your pricing, processes, or client relationships.
- Push for a 2-3 year term instead of perpetual. Most business information loses its sensitivity over time.
- Add explicit carve-outs for information you already know or independently develop.
- Ensure there's a legally compelled disclosure exception — you should never be unable to comply with a court order.
- If the NDA includes a non-compete, treat it as a separate negotiation entirely.
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Review My ContractFrequently Asked Questions
What should I look for before signing an NDA?
Check five things: (1) the definition of confidential information — is it reasonable or overly broad? (2) the term — is there an expiration? (3) whether it's mutual or one-sided, (4) what happens if you breach it — are damages capped? (5) whether there are hidden non-compete or non-solicitation clauses.
Can I get in trouble for breaking an NDA?
Yes. Breaching an NDA can result in lawsuits, monetary damages, and injunctive relief (court orders to stop you from further disclosure). The severity depends on what was disclosed and the damages clause in your NDA.
How long does an NDA last?
It depends on the agreement. Common terms are 1-5 years for general business information. Trade secrets may be protected indefinitely. Perpetual NDAs for general business information are a red flag — push for a defined term.
Should I sign an NDA before a job interview?
Pre-interview NDAs are common in tech and creative industries. They're usually reasonable if limited to information shared during the interview process. Be wary if the NDA is overly broad or includes non-compete provisions.
What's the difference between a mutual and unilateral NDA?
A unilateral NDA protects only one party's information — you agree to keep their secrets but they have no obligation regarding yours. A mutual NDA protects both parties equally. If you're sharing sensitive information, insist on mutual.