What to Check Before Signing an NDA
NDAs look interchangeable, so they get signed on autopilot. A minority contain terms that go well beyond confidentiality, and those are the ones worth catching.
Run these seven checks before you sign.
1. Is it mutual?
If both sides will share information, the NDA should protect both. A one-way NDA in a two-way conversation means only you carry obligations. Asking to make it mutual is a routine request.
2. How broadly is confidential information defined?
"All information disclosed, whether or not marked confidential" makes it impossible to know what you are restricted from using. Look for the standard exclusions: already public, independently developed, lawfully received elsewhere, or compelled by law.
3. How long does it last?
Two to five years is normal for commercial information; perpetual obligations on ordinary business data are not. A trade-secret carve-out lasting as long as the information stays secret is reasonable and standard.
4. Is there a non-compete hiding in it?
Search the document for "compete", "solicit", "engage" and "similar business". Restrictions on who you can work with next do not belong in a confidentiality agreement, and in several states they would not be enforceable anyway.
5. Does it assign your IP?
An NDA protects information. It should not transfer ownership of anything you create, and it should not grant a licence to use your materials. If it does either, that is a different agreement wearing an NDA's title.
6. What are the remedies?
Injunctive relief is standard. One-sided fee-shifting, liquidated damages of a fixed dollar amount, or personal liability for a company signatory are not — check who is actually bound before signing.
7. What happens at the end?
Return-or-destroy obligations are normal, but carve out archival backups and copies you must retain for legal or regulatory reasons. Otherwise you are agreeing to something your systems cannot actually do.
Run it through the checker before you sign
Upload the contract and get a 0-100 risk score, a plain-English list of the clauses that work against you, and suggested wording to send back.
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LegalAIContracts provides document automation and AI analysis, not legal advice. Professional review is advisable for high-value or unusual agreements.