NDA FAQ

No, you never have to sign any contract. An NDA is a contract that requires mutual agreement. You have several options:

• Sign it as-is if the terms are acceptable
• Negotiate changes to terms you find problematic
• Propose your own NDA as a counter-offer
• Decline entirely and walk away from the relationship

However, understand that the other party may choose not to proceed if you don't sign. It's a business negotiation - they want protection, and you want fair terms. Finding middle ground is usually possible.

One-way (unilateral) NDA: Only one party (the "disclosing party") shares confidential information, and only the other party (the "receiving party") has confidentiality obligations. Common when:

• You're a job candidate receiving company information
• You're evaluating a vendor's proprietary technology
• One party clearly has more sensitive information to protect

Mutual (bilateral) NDA: Both parties may share confidential information and both have equal obligations to protect the other's information. More appropriate when:

• Exploring a partnership or joint venture
• Both companies will share trade secrets
• Business discussions where both sides reveal sensitive data

Typical NDA terms depend on the context:

• Business discussions: 2-3 years is standard
• Employment NDAs: Duration of employment plus 1-3 years after
• Trade secrets: May warrant 5+ years or "as long as the information remains a trade secret"
• M&A due diligence: 2-5 years

This is a common negotiation tactic. Here's the reality:

• Large companies may have genuinely rigid policies for small deals, but can often make exceptions for valuable relationships
• Most companies can and do modify their templates when pushed professionally
• "Standard" doesn't mean "fair" - their standard may be heavily one-sided

How to respond:

• Focus on the most problematic terms (pick your battles)
• Explain why specific terms are unreasonable
• Propose alternative language that addresses their concerns
• Ask "Can you explain the business reason for this term?"

Almost always negotiable:

• Duration/term (especially perpetual terms)
• Definition of "Confidential Information" (if overly broad)
• Return/destruction timeline
• Notice periods

Often negotiable:

• Governing law and venue
• Indemnification terms
• Third-party disclosure restrictions
• Making a one-way NDA mutual

Rarely negotiable (but try if problematic):

• Basic confidentiality obligations
• Standard exceptions (public info, prior knowledge, etc.)
• Right to seek injunctive relief

Professional pushback is expected in business negotiations. Here's how to do it well:

• Be specific: Point to exact clauses, not vague concerns
• Explain your reasoning: "This is concerning because..."
• Offer alternatives: Don't just reject - propose solutions
• Acknowledge their interests: "I understand you need protection for X..."
• Pick your battles: Focus on 2-3 key issues, not every minor point

Consequences depend on the NDA terms and breach severity:

• Monetary damages: The other party can sue for actual losses caused by your breach
• Injunctive relief: Court order to stop further disclosure
• Liquidated damages: Some NDAs specify a fixed amount (e.g., "$50,000 per breach")
• Attorney's fees: You may have to pay their legal costs

Mitigating factors:

• Accidental vs. intentional breaches are treated differently
• How quickly you notified them and took corrective action
• Whether actual harm occurred
• Your overall good faith in the relationship

Yes, almost always. Most well-drafted NDAs include exceptions for:

• Legal advisors (attorneys bound by professional duty)
• Financial advisors (accountants, auditors)
• Court orders or legal requirements

Even if the NDA doesn't explicitly mention legal advisors, attorney-client privilege generally protects these communications.

This is a serious red flag. NDAs and non-competes are fundamentally different agreements:

• NDA: "Don't share our secrets"
• Non-compete: "Don't work in our industry"

Hidden non-competes in NDAs are problematic because:

• You're not being asked to sign a non-compete directly
• The implications may not be clear
• Many states (including California) find non-competes unenforceable

What to do:

• Request deletion of any competitive restriction language
• If they insist, negotiate it as a separate agreement with clear terms
• Consult an employment attorney before signing

General guidelines:

• Acknowledge receipt: Within 24 hours (shows professionalism)
• Initial review: 2-3 business days for simple NDAs
• Full review with feedback: 5-7 business days for complex NDAs
• Negotiate/sign: Depends on back-and-forth, typically 1-2 weeks total

Not necessarily, but it depends on:

• Deal size: Major partnerships or employment with significant equity warrant review
• Complexity: NDAs with unusual terms or many pages
• Red flags: If you spot concerning clauses
• Your experience: Less if you've reviewed many NDAs before

When attorney review is worth it:

• Employment NDAs with equity stakes over $50K
• M&A or investment discussions
• NDAs with hidden non-competes or IP assignments
• International deals with unfamiliar jurisdictions
• Any NDA that makes you uncomfortable

Yes, electronic signatures are legally valid for NDAs in most circumstances:

• E-SIGN Act (US): Validates electronic signatures for most contracts
• UETA: State-level laws supporting electronic signatures
• International: Most developed countries have similar laws

Common e-signature methods:

• DocuSign, HelloSign, Adobe Sign (most common)
• Email confirmation with typed name
• PDF signature tools

Essential post-signature steps:

• Save a copy: Keep the fully executed version in a secure location
• Note the term: Calendar when it expires or requires renewal
• Brief your team: If applicable, inform employees who'll handle the confidential information
• Document what's shared: Keep records of what confidential information you receive
• Set up proper handling: Secure storage, access controls, etc.

Generally yes - standard NDAs include exceptions for:

• Information that was publicly available before disclosure
• Information that becomes public through no fault of yours
• Information you knew before signing the NDA (with proof)
• Information you independently developed
• Information received from a third party with no restrictions

It's common for employers to request NDAs before sharing sensitive information during interviews. Here's what to watch for:

Acceptable terms:

• Protecting proprietary technology or trade secrets
• Reasonable term (1-3 years post-employment)
• Clear definition of what's confidential
• Standard exceptions (public info, prior knowledge)

Red flags to negotiate:

• Hidden non-compete clauses
• IP assignment provisions (should be separate)
• Perpetual or overly long terms
• Restrictions on your prior knowledge/skills

It's actually usually the opposite. In typical fundraising:

• Founders share pitch decks and financial information
• Investors are the ones receiving confidential information
• Founders usually want NDAs from investors (which investors often refuse)

If an investor asks YOU to sign their NDA:

• Unusual but not unheard of
• May indicate they'll share proprietary deal terms or portfolio info
• Review carefully for anything beyond confidentiality
• Watch for hidden exclusivity or investment restrictions