Non-Disclosure Agreement (NDA)
Confidentiality Agreement · Confidentiality Undertaking
A Non-Disclosure Agreement (NDA) is a contract in which one or both parties agree not to share specific information with anyone outside the agreement. It defines what counts as confidential, how long the duty lasts, who the information can be shared with, and what happens if it leaks.
What an NDA actually does
An NDA creates a contractual obligation on top of whatever general duties already exist. If you share commercial pricing, source code, or M&A discussions with another party, general law may not protect that information reliably once it leaves your walls. An NDA closes that gap by specifying exactly which information is protected, by whom, for how long, and with what remedies if the promise is broken. A one-way (unilateral) NDA binds only the recipient. A two-way (mutual) NDA binds both parties — common when two companies are evaluating a partnership or acquisition and both will share sensitive material.
Why it matters
NDAs are one of the most-signed contracts in business, which makes them one of the most-overlooked. A weak or overbroad NDA can create real problems: it might purport to cover information that is already public, lock you into decades of restrictions that courts will refuse to enforce, or leave your most sensitive data unprotected through a drafting oversight. Reading the NDA before signing takes five minutes and prevents years of downstream friction.
Common pitfalls
- 1.Definition of confidential information is too narrow — only oral disclosures, or only explicitly marked documents.
- 2.Duration is unrealistic — perpetual NDAs are common but many courts will only enforce them for a reasonable period.
- 3.Permitted-disclosure list is missing — employees, advisers, and legal/regulatory disclosures usually need explicit carve-outs.
- 4.Return or destruction obligation is vague — what happens to data at the end of the relationship should be concrete.
- 5.Remedies clause overreaches — a liquidated-damages number unrelated to actual harm is often unenforceable.
Frequently asked questions
- What is the difference between an NDA and a confidentiality clause?
- An NDA is a standalone contract; a confidentiality clause is a section inside a larger agreement (such as an employment contract or master services agreement). The underlying legal concept is the same — the difference is document structure.
- How long does an NDA typically last?
- Most commercial NDAs run 2 to 5 years for general business information. Trade secrets are often protected for as long as they remain secret. Perpetual durations are common in drafts but many courts will not enforce them indefinitely.
- Do I need a lawyer to sign an NDA?
- For a standard business NDA, many professionals sign without legal review. For high-stakes matters — M&A, strategic partnerships, trade-secret disclosures — a lawyer’s review is advisable. Attorly can flag unusual clauses in under 60 seconds regardless.
Run the NDA through Attorly before signing
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