What is an NDA?
A Non-Disclosure Agreement (NDA) is a legal contract that prevents one or both parties from sharing confidential information. They are common before business discussions, job interviews, partnerships, and freelance work.
Step 1 — Identify the type of NDA
Unilateral NDAs protect only one party's information. Mutual NDAs protect both parties equally. Make sure the type matches the situation — if you are sharing information too, you want a mutual NDA.
Step 2 — Check what information is covered
The definition of "confidential information" should be specific. Broad definitions like "all information shared" can accidentally cover publicly available information and create unnecessary restrictions.
Step 3 — Check the duration
NDAs should have a fixed term — typically 2-5 years. A perpetual NDA with no end date is a red flag. You cannot be bound by confidentiality forever.
Step 4 — Check the exceptions
Standard NDAs include exceptions for information that is already public, information you already knew before signing, and information you receive from third parties independently. If these exceptions are missing, the NDA is too broad.
Step 5 — Check the governing law
The NDA should specify which country and state's law applies and where disputes will be resolved. Without this, a dispute could drag you into an unfamiliar jurisdiction.
Step 6 — Check the remedies clause
Many NDAs claim that any breach entitles the other party to injunctive relief and unlimited damages. Negotiate for a reasonable damages cap tied to the actual loss caused.
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