Most NDA disputes are not about whether the conversation was confidential. They are about what happens when information is disclosed that a party later wished it had not received — and whether the agreement said anything specific about it.
Mutual or one-way: which do you need?
A mutual NDA covers both parties, and is the right default. In practice most early conversations involve two-way disclosure — you share pricing, they share technical detail.
A one-way NDA protects only the disclosing party. It is appropriate when you are pitching to a potential customer and intend to disclose far more than you receive.
Starting with a mutual NDA when you have a one-way disclosure pattern creates an unnecessary asymmetry, and counterparties notice it.
The definitions that do the real work
Confidential information is defined by what you leave out more than what you include. The most effective definitions cover three things:
- Types of information — named categories, so the parties know roughly where the line sits.
- Marked or unmarked information — a mechanism for marking documents as confidential, and a fallback for information disclosed verbally.
- Exclusions — what is not confidential even if it was disclosed in confidence.
The exclusions matter most, because they are where a reasonable NDA gives ground. Standard exclusions:
- Information the recipient already knew before disclosure.
- Information that becomes public through no fault of the recipient.
- Information independently developed without using the disclosed information.
- Information lawfully received from a third party without a duty of confidentiality.
- Information the recipient can demonstrate was already lawfully in its possession.
Without these exclusions, an NDA can be unenforceable against a recipient who cannot realistically prove the negative.
Clauses worth reading carefully
Purpose limitation. State the specific permitted use — usually evaluating or pursuing a business relationship. A vague purpose grants more permission than you intend.
Compelled disclosure. An NDA that prohibits all disclosure becomes impossible to honour when a regulator or court requires it. Include the exception, and — critically — what the recipient must do: notify you promptly, cooperate on any protective order, and disclose only what is legally required.
Term and survival. How long does the obligation last? Common periods are two to five years. Perpetual confidentiality clauses attract judicial scrutiny and are harder to enforce. Note that trade secrets may be protected indefinitely under other rules even where the NDA term ends.
Return or destruction. What happens at the end? State the period for returning or destroying information, whether backups are exempt, and — this is often missed — whether a legal requirement to retain anything is carved out.
Remedies. Injunctive relief is usually requested for breach, because waiting for a damages trial does not help if the information has already been used. This is a procedural point, not a magic clause, but requesting it is standard.
What an NDA cannot do
Worth being direct, because NDAs are frequently asked to do work they cannot do. An NDA does not stop someone from independently developing the same idea. It does not grant you a licence to the recipient’s intellectual property. It does not prevent lawful whistleblowing or regulatory reporting in most jurisdictions, and a clause purporting to do so may be void on that basis.
It also does not bind a party’s employees or contractors unless they are themselves bound — which is why NDAs normally require the recipient to flow obligations down to anyone who needs access.
Before signing an NDA
- Check whether a mutual or one-way structure matches your actual disclosure pattern.
- Confirm the term is proportionate to the sensitivity of the information.
- Confirm there are exclusions — an NDA without them is a red flag.
- Confirm compelled disclosure is addressed with a notification obligation.
- Confirm remedies are specified, and check they are available in the chosen jurisdiction.
- Confirm you are signing as an entity with the authority to be bound.
Frequently asked questions
Are NDAs enforceable across borders? Generally yes, but enforcement depends on the governing law and forum clause. A judgment from a court with no connection to the defendant can be very difficult to enforce — which is why arbitration is often specified in cross-border NDAs.
Can an NDA cover an employee’s inventions? Often the invention assignment clause does that work instead, and treating them together is usually cleaner than negotiating two documents.
Do I need to sign an NDA to receive a pitch deck? Usually the recipient wants a mutual NDA before sharing. Reasonable, though you may prefer a short-form NDA limited to the specific deck rather than a broad one that governs everything.
Does a verbal disclosure count? It can. If you want to be able to rely on the NDA, mark documents and follow up in writing after verbal conversations.
Get the template
A free mutual NDA template, alongside an international services agreement and a study abroad agency agreement, is in the ABSign template library. Sign on iPhone and iPad or in any browser, with a timestamped audit trail.
General information, not legal advice. Have your specific NDA reviewed by a qualified lawyer in the relevant jurisdiction.
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