Red Flags to Watch For
These provisions should trigger immediate concern and careful review. While not always deal-breakers, they indicate the other party is seeking aggressive terms that may be unreasonable or unenforceable.
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"All information of any kind whatsoever"
Unlimited scope definitions are often unenforceable and create impossible compliance burdens. Courts require reasonable boundaries for confidentiality obligations.
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No marking or designation requirement
If all information is automatically confidential regardless of marking, you may inadvertently breach the NDA through normal business communications. Push for at least oral disclosure confirmation requirements.
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"Reasonably should be understood to be confidential"
This subjective standard creates uncertainty and invites disputes. What one party considers obviously confidential, another may view as general industry knowledge.
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No reference to exclusions
A definition that does not reference or incorporate standard exclusions (public information, prior knowledge, independent development) is incomplete and one-sided.
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"Including without limitation" followed by vague categories
This catch-all construction can expand scope unpredictably. Categories like "all information relating to business" or "any data of value" provide no meaningful boundaries.
What to Push For
These provisions protect your interests and create a workable agreement. Consider which items are most important based on whether you are primarily disclosing or receiving information.
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Specific, enumerated categories of information
Instead of vague catchalls, negotiate for a list that matches what will actually be disclosed: technical specifications, customer lists, pricing data, etc. This creates clarity for both parties.
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Reasonable marking or confirmation requirements
Written disclosures should be marked; oral disclosures should require written follow-up within 30 days. This creates a clear record of what is actually protected.
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Explicit reference to exclusions section
Ensure the definition expressly incorporates the exclusions clause: "Confidential Information does not include information that falls within the exceptions set forth in Section X."
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Limitation to information disclosed "in connection with" the Purpose
Information shared outside the scope of the defined business purpose should not automatically become protected. This prevents scope creep in the relationship.
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Clarity on derivative information
Address whether notes, summaries, or analyses created by the receiving party are considered Confidential Information. Ambiguity here causes disputes later.
Sample Redline Language
Below are common redline modifications you can propose depending on your negotiating position. Deletions are shown in red with strikethrough; additions are shown in green.
Negotiation Strategies by Position
Disclosing Party Preserve Broad Categories
If the receiving party requests narrow categories, respond by identifying specific sensitive information types you will share. Often, once they understand the scope, they will accept broader language.
Disclosing Party Resist Strict Marking
Argue that marking requirements create administrative burden that may result in inadvertent failures. Propose "reasonably should be understood" as a backstop for unmarked but obviously confidential materials.
Receiving Party Request Confirmation Periods
If the disclosing party resists marking requirements, negotiate for oral disclosure confirmation within 30 days. This is a reasonable compromise that most parties accept.
Receiving Party Link to Purpose
Push for language limiting protection to information disclosed "in connection with" or "for the Purpose of" the defined business relationship. This prevents scope creep.
Both Parties Use Examples
When negotiating, give concrete examples of information that will be shared. This helps both parties understand what the definition actually covers and whether the proposed language is appropriate.
Both Parties Consider Enforceability
Remind the other party that courts may refuse to enforce overly broad or vague definitions. A clear, reasonable definition is in both parties' interests.
Common Negotiation Outcomes
Based on typical commercial negotiations, here are the most common outcomes:
Most Common Compromise: The definition includes both marking requirements for written disclosures AND a "reasonably should be understood" standard as a safety net, with oral disclosures requiring written confirmation within 30 days. This balances protection with practicality.
When Disclosing Parties Win: Sophisticated disclosing parties (VCs, large tech companies, franchisors) often secure broad definitions without marking requirements when they have superior bargaining power.
When Receiving Parties Win: Professional services firms (law firms, consultants, accountants) who sign many NDAs often negotiate strict marking requirements to manage compliance across multiple engagements.
Key Insight: The marking requirement is often the most heavily negotiated aspect of this clause. Be prepared to offer or accept reasonable compromises on confirmation timeframes (10, 30, or 60 days) to reach agreement on the core definition.