NDA Review Checklist: 8 Checks Before You Sign a Non-Disclosure Agreement
An NDA is usually the first document in a relationship and the one people read least carefully — it is short, it looks standard, and there is a meeting waiting. It is also the document most often used to smuggle in terms that have nothing to do with confidentiality.
Eight checks, in the order they matter.
1. Is it mutual?
Check: does the obligation run both ways?
A one-way NDA is fine when only one side is disclosing. It is not fine when both are, and a one-way NDA presented for a two-way conversation is the first sign of how the rest of the negotiation will go.
Look for: “each party” rather than “the Receiving Party”. If it is one-way and it should not be, ask. It is the easiest change to get.
2. Is “Confidential Information” defined?
Check: can you tell, reading the definition, what is covered?
| Reasonable | Warning sign |
|---|---|
| Information marked confidential, or which a reasonable person would understand to be confidential | ”All information disclosed, in any form, at any time” |
| Specific categories: technical, financial, customer data | Everything ever said in any meeting |
The consequence of a vague definition: you cannot comply with it, because you do not know what it covers. An unenforceably broad definition also helps nobody — including the party who wrote it.
3. Are the standard exclusions there?
Check: four carve-outs. Their absence is the most common defect in a bad NDA.
Information should not be confidential if it:
- was already known to you before disclosure,
- is or becomes public through no fault of yours,
- you developed independently without using their information, or
- you are legally required to disclose (with notice to them where possible).
Why it matters: without these, you are technically in breach the moment you use something you already knew. Courts often read them in anyway, but “a court would probably fix this” is not a position to sign into.
4. How long does it last?
Check: the duration of the obligation, not of the agreement.
Reasonable: two to five years for ordinary business information. Indefinite for genuine trade secrets, and only for those.
Push back on: perpetual confidentiality over everything. You are agreeing to an obligation with no end date, which you will still be carrying long after you have forgotten what was said.
5. What are you allowed to do with the information?
Check: the permitted purpose, and who you may share with.
- Purpose — should be defined (“evaluating a potential partnership”) rather than absent.
- Your team — you must be able to share with employees and advisers who need it, usually on the condition they are bound by similar terms.
- Your lawyers and accountants — should be explicitly permitted.
Warning sign: an NDA that forbids sharing with anyone, which means you cannot take advice on the deal itself.
6. What is smuggled in alongside?
Check: every clause that is not about confidentiality.
This is where NDAs do their real damage. Things that appear in NDAs and have no business being there:
- Non-compete clauses — restricting who else you can work with
- Non-solicit clauses — usually reasonable, but read the scope
- IP assignment — an NDA is not the place to transfer ownership
- Exclusivity — quietly taking you off the market during discussions
- Liquidated damages — a fixed sum per breach, which can be enormous
The rule: an NDA should be about information. Anything else in it should be negotiated as what it actually is, not accepted because the document is called a non-disclosure agreement.
7. What happens at the end?
Check: return or destruction of materials.
Reasonable: on request, you return or destroy what you were given, with an exception for backups and for copies you must keep by law.
Warning sign: an obligation to certify destruction of all copies including backups, which is often impossible to comply with literally.
8. Remedies, and where a dispute happens
Check: what happens if it is breached, and where.
- Injunctive relief — standard in NDAs, since damages are hard to prove for a leak. Reasonable.
- Liquidated damages — a fixed penalty. Look hard at the number.
- Governing law and jurisdiction — a clause naming a court on another continent means, in practice, that the agreement is unenforceable by you and enforceable against you.
The five-minute version
If you have five minutes rather than thirty, check these four:
- Is it mutual?
- Are the four exclusions present?
- How long does the obligation last?
- Is there anything in here that is not about confidentiality?
Those four catch most of what goes wrong.
Getting a second opinion
Run the NDA through a free review — it scores exactly the territory above: an undefined “Confidential Information” moves Clarity and Completeness, a one-way obligation moves Balance of Terms, and a missing remedy moves Risk Protection. Three documents a day, no account.
If the NDA arrived as a scan or a photograph, give it a text layer first — otherwise there is nothing in the file for anything to read.
Related
- How to spot a bad clause in an NDA
- The contract review checklist — the longer version, for commercial contracts
- Contract clause library — what each clause is for
- NDA review with AI
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