NDA Guide
NDA red flags to check before signing
Most NDAs are routine, but a few provisions can create obligations far beyond keeping a secret. These are the clauses worth slowing down for.
Want to check a real agreement? Use the free NDA Analyzer to surface clauses and questions worth reviewing.
Common NDA red flags
A red flag does not automatically mean a clause is invalid. It means the term deserves closer review and, in many cases, negotiation.
- “Confidential information” is defined as virtually everything.
- The confidentiality obligation never ends for ordinary business information.
- Only one party receives protection even though both sides disclose information.
- The NDA includes a non-compete or broad non-solicitation restriction.
- There are fixed or liquidated damages for any breach.
- You must pay the other side’s legal fees regardless of the circumstances.
- The agreement chooses a distant or inconvenient forum.
- The NDA claims ownership of ideas or work product rather than just protecting secrecy.
- Required disclosures to regulators, courts, or government agencies are not clearly addressed.
- The agreement lets the other side change important terms unilaterally.
Broad definitions deserve special attention
If an NDA protects “all information” without meaningful limits, it may be difficult to know what you are actually required to safeguard. Clear categories and exclusions make the obligation easier to understand and follow.
Watch for restrictions disguised as confidentiality
A confidentiality agreement should primarily govern the use and disclosure of information. Restrictions on where you can work, whom you can hire, which customers you can contact, or what you can build are separate business restrictions and should be evaluated as such.