Non-Disclosure Agreements (NDAs): What to Check

Learn the common moving parts of an NDA, from confidential information and permitted use to exceptions and duration.

What an NDA tries to protect

A non-disclosure agreement sets expectations about information shared between parties. It typically defines confidential information, who may receive it, the purpose for which it can be used and how it must be protected.

Some NDAs are one-way; others are mutual. Choose the structure that reflects who is actually sharing sensitive information.

Definitions and exceptions

Check whether confidential information is defined so broadly that ordinary business knowledge becomes restricted. Typical exceptions may address information already public, independently developed or lawfully received from another source, but wording varies.

Look at permitted disclosure to employees, advisers and contractors. The agreement should make clear what safeguards apply when those people need access.

Duration and remedies

Confidentiality obligations may last for a fixed period or, for some categories of information, longer. Review when the agreement starts, what happens on termination and any requirements to return or destroy materials.

Examine any injunctive-relief, damages or indemnity language. Such clauses can materially change exposure and deserve careful review.

Practical drafting approach

Start with the purpose of the exchange and the information genuinely needing protection. Use an AI-generated draft as a starting point, then check it against the actual transaction and applicable law. Consult a lawyer for sensitive trade secrets or high-stakes deals.