Reviewing an NDA in Ten Minutes

NDAs arrive constantly and are mostly unremarkable, which creates two opposite failure modes: reviewing each one from scratch as though it were a major contract, or signing them unread because the last forty were fine. A short checklist covering the clauses that actually carry risk handles the volume without either.

1. What counts as confidential

Read this definition first. A clause that captures everything disclosed by any means, with no marking requirement and no carve-outs, makes the agreement unmanageable in practice — you cannot comply with obligations over information you cannot identify. Look for the standard exceptions: already public, independently developed, lawfully received from a third party, already known.

2. Which way it runs

One-way or mutual, and if one-way, which way. It is surprisingly common for a document presented as mutual to impose materially heavier obligations on one side, particularly around return of materials and permitted recipients.

3. Duration

Two periods matter and they are often conflated: how long disclosures are covered, and how long the confidentiality obligation lasts for each disclosure. Perpetual obligations are common and rarely realistic; three to five years post-disclosure is a normal position for commercial information, with trade secrets sometimes treated separately.

An obligation your organisation cannot actually operate is a liability, not a protection.

4. Permitted recipients and purpose

Check that you can share with the people who need it: employees, professional advisers, affiliates, and — if relevant — potential investors or subcontractors. Then check the permitted purpose is wide enough to cover what you are actually doing. A purpose limited to 'evaluating the Transaction' can be a problem if the discussion evolves.

5. Residuals

A residuals clause permits use of information retained in the unaided memory of personnel. It sounds reasonable and can substantially undercut the protection you thought you had. In a genuinely mutual agreement it may be acceptable; where you are the primary discloser it usually is not.

6. The boring back end

• Governing law and jurisdiction — enforceable and affordable for you.

• Return or destruction of materials, with a realistic carve-out for backups and legal retention.

• No licence or IP transfer implied by disclosure.

• No obligation to proceed with any transaction.

• Whether injunctive relief is expressly available.

Then build the fallbacks once

The reason this can take ten minutes is that the positions are decided in advance. Record your preferred and acceptable positions on each of the six points, let the commercial team apply them, and escalate only the genuine deviations. That is a clause library doing its job.

This is a practical review checklist, not legal advice, and enforceability of confidentiality terms varies by jurisdiction. Have your standard positions set by qualified counsel.