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What is NDA?

A non-disclosure agreement (NDA) is a legally binding contract that establishes a confidential relationship between parties. The signer agrees not to disclose covered confidential information. NDAs are used in business negotiations, employment relationships, vendor partnerships, and product development. They protect trade secrets, business plans, client lists, and any proprietary information that could harm the disclosing party if shared publicly.

What to Look for When Reviewing

  • Definition of "Confidential Information" — is it broad or narrowly scoped?
  • Duration of confidentiality obligations — does it expire or run indefinitely?
  • Permitted disclosures — who can the receiving party share information with?
  • Exclusions from confidentiality — publicly available info, independently developed?
  • Return or destruction of information upon agreement termination
  • Jurisdiction and governing law clause
  • Whether the NDA is mutual (both parties) or unilateral (one-way)

Common Red Flags to Watch For

  • Overly broad "Confidential Information" definition that could capture publicly available data
  • No expiration date — perpetual confidentiality can be legally unenforceable in some jurisdictions
  • Missing carve-outs for court orders or regulatory disclosure requirements
  • Asymmetric obligations where only one party is restricted despite a mutual framing

How AI Changes the Review Process

AI NDA analysis extracts every key clause in seconds — obligations, carve-outs, duration, jurisdiction — and flags provisions that deviate from market standard. Instead of reading 15 pages line by line, you get a structured breakdown with exact page citations pointing back to the source text. This is especially valuable when reviewing a stack of NDAs before a due diligence process.

Frequently Asked Questions

What should I look for when reviewing an NDA?
Focus on the definition of confidential information (scope), duration of obligations, permitted disclosures, exclusions, and the governing law. Also check whether the NDA is mutual or one-sided.
How long does an NDA typically last?
Most commercial NDAs last 2–5 years. Employment NDAs may run indefinitely for trade secrets. Perpetual NDAs are increasingly scrutinized — some courts won't enforce them after a reasonable period.
Can an NDA be one-sided?
Yes. A unilateral NDA restricts only the receiving party. A mutual NDA restricts both parties equally. Employment NDAs are typically unilateral (employee cannot disclose employer's secrets).
What happens if someone violates an NDA?
Remedies typically include injunctive relief (stopping the disclosure), compensatory damages for economic harm, and in some cases liquidated damages if specified in the agreement.
Is AI NDA analysis as accurate as a lawyer?
AI analysis is excellent for extracting structure, identifying clauses, and flagging common issues at scale. For high-stakes NDAs (M&A, IP licensing), have a lawyer review the AI output — but AI will surface the issues worth discussing.

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