How to Review an NDA (Non-Disclosure Agreement)

What is an NDA?

A Non-Disclosure Agreement (NDA) is a contract where one or both parties agree to keep certain information confidential. You'll encounter them before job interviews, at the start of freelance projects, when exploring a business acquisition, or any time someone wants to share sensitive information with you before a formal agreement is in place.

NDAs are a normal part of doing business. But the specifics of what you're agreeing to — and for how long — can vary enormously from one contract to the next.

Mutual vs. one-way NDAs

The first thing to check is whether the NDA is mutual (both parties agree to keep each other's information confidential) or one-way (only one party is bound by confidentiality obligations).

One-way NDAs are common and often fine — for example, if a company is sharing its trade secrets with you, it makes sense that only you are bound by confidentiality. But pay attention to which direction the obligation runs. In some cases, a one-way NDA protects only the company, even when you're also sharing sensitive information about your own processes or methodology.

If you're sharing something valuable, ask for mutual protection.

5 things to look for in any NDA

1. Definition of "Confidential Information"

This is the most important clause in the NDA. It defines what you're actually agreeing to keep secret. Watch for:

• Overly broad definitions: Language like "all information disclosed in any form" with no exceptions can technically include public information, things you already knew, or information you develop independently.
• Standard carve-outs: A well-drafted NDA should exclude information that is already publicly known, that you independently develop, or that you receive from a third party without restriction.
• Oral disclosures: Some NDAs cover verbal conversations as well as written materials. This creates practical problems — you can't always know if a casual conversation is covered.

2. Duration of the obligation

How long are you bound by this NDA? Options range from 1 year to indefinite. For most commercial NDAs, 2–5 years is common. Perpetual NDAs (that last forever) are worth questioning — especially for information that will become outdated or publicly available.

Note: Trade secrets can legitimately require indefinite protection. But general business confidentiality probably shouldn't follow you for the rest of your career.

3. Permitted disclosures

You should always be permitted to disclose confidential information if required by law (e.g., a court order or government investigation). Check that the NDA contains a provision for legally compelled disclosure and ideally requires the disclosing party to notify the other party so they can seek protection.

Similarly, you should be able to share information with employees, contractors, or advisors who have a legitimate need to know — provided they're bound by similar confidentiality obligations.

4. Residual knowledge

Some NDAs include a "residuals" clause that allows a party to use general knowledge and skills they've retained in memory from the disclosure. This is more common in technology agreements. It's generally a balanced provision — but read it carefully to understand what it permits.

5. Return or destruction of materials

When the engagement ends, what happens to any confidential materials you received? The NDA should specify whether you need to return them, destroy them, or both — and provide a process for confirming that you've done so.

Red flags in NDAs

• No time limit on the confidentiality obligation for non-trade-secret information
• No standard carve-outs for publicly known information or independent development
• Restrictions on what work you can do after the engagement (a non-compete hidden inside an NDA)
• IP assignment language buried in the NDA that transfers ownership of what you create during the engagement
• No mutual protection when you are also sharing sensitive information

When to get a lawyer involved

Most NDAs signed before a freelance project or a job interview are low-stakes — a reasonable NDA with reasonable terms. Reading it carefully yourself (or using a tool like ReadThePrint to flag the concerning parts) is usually sufficient.

For a plain-English overview of how NDAs work under U.S. law, the Cornell Law School Legal Information Institute is a good reference.

But you should involve a lawyer when:

• The NDA is connected to a major deal (acquisition, licensing, significant partnership)
• The definition of confidential information is unusually broad
• There's any language that could restrict what work you can do in the future
• There are significant liquidated damages provisions