NDAs Explained: What You're Actually Agreeing To

You've just been offered a new job, a consulting gig, or access to an exciting startup idea. Before anything else, they hand you an NDA — a Non-Disclosure Agreement.

"Just sign here," they say. "It's standard."

But is it?

What Is an NDA?

An NDA is a legal contract that prevents you from sharing certain information. It creates a confidential relationship between you and the other party.

NDAs are used for:

• Job interviews (to discuss company secrets)
• Business partnerships
• Startup pitches
• Consulting engagements

Key Clauses to Understand

1. Definition of Confidential Information

This is the heart of the NDA. What exactly are you agreeing to keep secret?

Watch out for overly broad definitions like "any information shared during our relationship." This could include almost anything.

2. Duration

How long does the NDA last?

• 1-2 years is common for general business information
• 5+ years for trade secrets
• "Perpetual" NDAs last forever — be cautious

3. Exceptions

Standard NDAs include exceptions for:

• Information you already knew
• Information that becomes public
• Information you receive from a third party
• Disclosures required by law

If these exceptions aren't included, the NDA may be too restrictive.

4. Non-Compete Language

Some NDAs include hidden non-compete clauses. This could prevent you from working in your field after the relationship ends.

This is NOT standard and should be negotiated separately.

Red Flags

• No clear end date — Indefinite obligations are risky
• One-sided terms — You have obligations, they don't
• Overly broad definitions — Everything becomes "confidential"
• Harsh penalties — Disproportionate damages for minor breaches

Before You Sign

Take 10 minutes to read the NDA. If something seems off, ask questions. A reasonable party will explain their terms.

Or, upload the NDA to OpenClauses for a plain-English breakdown.

Understand before you commit.