NDA review checklist for business teams

NDAs are one of the most common contracts any business signs — and one of the easiest to gloss over. Most look similar, but the differences matter. Here's what to check before you sign.

Scope of confidential information. Is the definition narrow (specific data sets, trade secrets) or broad ("all information exchanged")? Broad definitions can create obligations you didn't expect. If you're sharing product data, customer lists, or financials, make sure the definition covers what you need protected — and not more than you intend.

Direction. Is the NDA mutual or one-way? If you're both sharing information, it should be mutual. One-way NDAs protect only the disclosing party. If you're signing a one-way NDA as the receiving party, understand what you're committing to and whether you'll need protection too.

Duration and survival. How long does the obligation last? Two to three years is common for commercial NDAs. Some say "perpetual" for trade secrets, which is standard, but perpetual for all information can be unreasonable. Check both the NDA term and the survival period after expiration.

Carve-outs and exclusions. Standard carve-outs include information that's already public, independently developed, or received from a third party. If these are missing or narrowly worded, you may have obligations over information you can't practically protect.

Permitted disclosures. Can you share with employees, contractors, or advisors who need to know? Most NDAs allow this with a "need to know" clause, but some require prior written consent. If you need to share with your team, make sure the NDA allows it.

Remedies. Does the NDA state that a breach entitles the other party to injunctive relief? That's standard. But watch for liquidated damages clauses or indemnity obligations that go beyond what's typical for an NDA. These can create outsized exposure for what's meant to be a preliminary agreement.

Residuals clause. Some NDAs include a "residuals" provision allowing the receiving party to use general knowledge retained in memory. This can significantly weaken protection. If you're the disclosing party, consider whether you're comfortable with this.

Non-solicitation or non-compete riders. Occasionally, NDAs include provisions restricting hiring or competing. These go beyond confidentiality and should be reviewed carefully — they may not even be in the section you'd expect.

An NDA shouldn't take hours to review, but it shouldn't take zero minutes either. For a structured risk view on any NDA or contract, try a free risk analysis or see an example report.