GUIDE · 05 / 8

Non-disclosure agreement (NDA)

Term · exclusions · mutuality · permitted use · return of information · remedies

WHAT IT IS

The agreement protecting confidential information exchanged before or during a business relationship.

WHEN IT COMES INTO PLAY

Before a deep-dive demo, an RFP, due diligence or any sensitive discussion with a prospect.

WHY IT MATTERS

The NDA is often the first document signed in a business relationship, and most often signed unread. Yet it can contain heavy commitments: non-solicitation, perpetual term, automatic remedies. A good NDA protects what needs protecting without stopping the parties from working.

WHAT IT OFTEN CONTAINS

Definition of confidential information

What is protected: everything exchanged, or only what is marked confidential.

Standard exclusions

Information already known, public or independently developed, which is not covered.

Permitted use and authorized persons

What the receiving party may do with the information, and who it may share it with.

Duration of the obligation

The period during which the confidentiality obligation applies.

Return or destruction

What happens to the information at the end of the relationship.

Remedies and injunction

The right to seek an injunction and, sometimes, compensation.

WHAT OFTEN GETS NEGOTIATED

One-way or mutual

WHAT THE BUYER OFTEN ASKS FOR

A one-way NDA protecting only their information.

SUPPLIER SIDE

A mutual NDA as soon as both parties share information.

Duration of protection

WHAT THE BUYER OFTEN ASKS FOR

A perpetual obligation.

SUPPLIER SIDE

2 to 5 years, with longer protection reserved for trade secrets.

Residuals clause

WHAT THE BUYER OFTEN ASKS FOR

A residuals clause allowing use of what is retained in memory.

SUPPLIER SIDE

No residuals clause, or a tightly framed one.

Non-solicitation slipped into the NDA

WHAT THE BUYER OFTEN ASKS FOR

A non-solicitation slipped into the NDA.

SUPPLIER SIDE

Remove the non-solicitation, or limit it to the people directly involved.

SAMPLE CLAUSE

EXCLUSIONS

« Confidential information does not include information that (a) is or becomes public through no fault of the receiving party, (b) was known to it before disclosure, or (c) is independently developed. »

IN PLAIN TERMSYou can't be blamed for using what's public, what you already knew, or what you created yourself.

BEFORE YOU SIGN

Is the NDA mutual if you also share information?

Are the standard exclusions there?

Is the term reasonable?

Is there a hidden non-solicitation clause?

Can you share with your advisors and team?

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