NDA Red Flags: What to Watch For
Non-disclosure agreements are so common that many people sign them without a second thought. But NDAs vary wildly in scope and consequence. A well-drafted NDA protects legitimate business secrets. A poorly drafted one can restrict your career, expose you to liability, and create obligations that last forever.
The biggest risk with NDAs is their breadth. Some define "confidential information" so broadly that nearly everything you learn becomes off-limits to discuss. Others impose obligations that extend years or even indefinitely after the relationship ends.
Before signing any NDA, make sure you understand exactly what you are agreeing to keep secret, for how long, and what happens if there is a dispute.
Red Flags to Watch For
Overly Broad Definition of Confidential Information
If "confidential information" includes essentially everything shared, written or verbal, marked or unmarked, the scope is too wide.
Perpetual or Excessively Long Duration
NDAs that last "in perpetuity" or for 10+ years are unusual. Most reasonable NDAs run 2-5 years after the relationship ends.
One-Sided Obligations
If only you have confidentiality obligations but the other party does not, the agreement is fundamentally unfair. Mutual NDAs are standard.
No Exceptions for Public Information
A proper NDA should exclude information that is publicly available, independently developed, or already known to you.
Harsh Penalty Clauses
Liquidated damages clauses in NDAs can make you liable for fixed amounts regardless of actual harm caused by a breach.
No Clear Definition of What Constitutes a Breach
Vague breach definitions make it easy for the other party to claim you violated the NDA even when you have not.
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Scan Your NDA (Non-Disclosure Agreement)Frequently Asked Questions
Is it normal to sign an NDA before a job interview?+
It is common in some industries, especially tech and finance. However, you should still read it carefully. Pre-interview NDAs should be narrow in scope and limited in duration.
Can I negotiate an NDA?+
Yes. Common negotiation points include narrowing the definition of confidential information, adding a sunset clause, making obligations mutual, and including standard exceptions.
What happens if I accidentally breach an NDA?+
Consequences vary by agreement. Some include liquidated damages, others allow the disclosing party to seek injunctive relief. The key is understanding the penalties before you sign.
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Disclaimer: This page is for educational purposes only and does not constitute legal advice. For questions about your specific situation, consult a qualified attorney.