How to Review an NDA (2026)

A non-disclosure agreement, or NDA, is a contract that lets two parties share confidential information while promising to keep it private and use it only for an agreed purpose. Most NDAs are routine, but a careless one can bind you for years, cover far more than you intended, or stop you using knowledge you already had. Reviewing one well does not take a lawyer for standard cases; it takes knowing what each clause should say and where the traps hide. This guide is a clause-by-clause checklist you can use on any NDA. It is general information, not legal advice; for a high-stakes deal, get a lawyer. ## First, the two questions that frame everything Before reading a word of the clauses, answer two questions. Which way does information flow? A one-way NDA protects one side disclosing to the other; a mutual NDA protects both. If both sides will share, insist on mutual, because a one-way NDA drafted by the discloser will be tilted against you. What is the purpose? The NDA should exist to evaluate a specific thing (a possible deal, a pilot, a supply arrangement). That purpose limits what the other side may do with your information, so it must be written down and narrow. ## The clause-by-clause checklist 1. Definition of confidential information. This is the heart of the NDA. It should be broad enough to cover what you will actually share, but not so broad that it swallows everything. Watch for definitions that cover all information disclosed, with no requirement to mark it confidential and no carve-outs; that is hard to comply with because you cannot track what is covered. A fair definition covers information that is marked confidential or that a reasonable person would understand to be confidential from its nature. 2. The standard exclusions. Every fair NDA excludes information that is already public, was already known to the receiver before disclosure, is received legitimately from a third party, or is independently developed without using the confidential information. If these carve-outs are missing, push to add them. Without them you could be in breach for using knowledge you already had or that became public anyway. 3. Permitted use and purpose. The agreement should say the information may be used only for the defined purpose and nothing else. A vague or missing purpose lets the other side use your information for anything. Tie use tightly to the stated purpose. 4. Permitted disclosures. The receiver will usually need to share with its own staff, advisers and affiliates. That is fine, but it should be limited to those who need to know for the purpose and who are themselves bound to confidentiality. Watch for free permission to share with affiliates or contractors with no obligation passed down. 5. Compelled disclosure. If a court or regulator orders disclosure, the NDA should allow it, but require the receiver to notify you first where lawful, so you can object or seek protection. A clause that allows disclosure on legal request without any notice is weaker than it should be. 6. Term and survival. Two separate clocks. The term is how long you can keep sharing under the NDA. The confidentiality obligation is how long the duty to protect lasts after disclosure, often several years, and sometimes indefinitely for trade secrets. Check both. A short term with a long or perpetual confidentiality obligation on your information can be a trap if you are the receiver; the reverse if you are the discloser. Decide which side you are on and read accordingly. 7. Return or destruction. On the end of the NDA, the receiver should return or destroy your information on request. Check whether they can keep copies (commonly for legal or backup reasons) and whether those retained copies stay subject to confidentiality. 8. No licence, no obligation. The NDA should say that sharing information grants no intellectual property licence and that neither side is obliged to proceed with any deal. These stop the NDA being read as more than it is. 9. Remedies. Many NDAs say the discloser may seek an injunction because money damages are inadequate for a leak. That is normal. Watch for one-sided penalty or indemnity clauses that go beyond this. 10. Governing law and disputes. Check which law applies and where disputes are heard. If it is a foreign jurisdiction, enforcing the NDA may be slow and expensive, which matters if the information is valuable. 11. Non-solicit and non-compete riders. Some NDAs smuggle in clauses stopping you hiring the other side's staff or competing. These are not confidentiality terms. Read them separately and push back if they are broader than you agreed; their enforceability also varies by jurisdiction. ## The traps that catch people out - A one-way NDA when the deal is two-way. You end up bound while the other side is free.

• An over-broad definition with no marking requirement and no carve-outs, which is impossible to comply with cleanly.
• A perpetual obligation buried in the survival clause when you are the receiver.
• Residuals clauses that let the other side freely use anything their people remember. Common in technology NDAs and often unfair to the discloser; read them carefully.
• Hidden non-solicit or non-compete riders.
• A purpose so broad it places no real limit on use. ## Practical questions before you sign Ask: which direction does information flow, and is the NDA mutual if it should be? How long does my duty to protect their information last, and can I live with that? Is the definition something I can actually comply with? Are the standard exclusions present? Is the purpose narrow and clear? Are there non-solicit or non-compete riders I did not expect? If the answers are all comfortable, a standard NDA is usually fine to sign. ## Reviewing NDAs at volume If you see a lot of NDAs, the slow part is reading each one against the same checklist and spotting where it departs from your standard. This is where contract review tools help: they read the document, flag the terms above, and show where it deviates from a fair baseline. Adira opens any document and colour-codes positions as favourable, neutral or unfavourable to your company, surfaces red flags and missing clauses, and lets you edit a clause in plain English and get a diff back, so a non-lawyer can see what to question. It is one AI workspace tuned to your company and built on Claude; see Adira. The checklist above stands on its own. ## Bottom line Review an NDA by framing it first (which way does information flow, and what is the purpose), then walking the clauses: definition, exclusions, permitted use and disclosures, compelled disclosure, term and survival, return, no-licence, remedies and governing law. Watch for over-broad definitions, perpetual obligations, residuals clauses and hidden non-solicit riders. Most NDAs are routine; knowing the checklist is what lets you tell the routine ones from the ones that need a lawyer.