Category: Contract types
Non-Disclosure Agreement (NDA)
A contract where one or both parties agree not to share specified confidential information with outsiders.
A Non-Disclosure Agreement, or NDA, is a contract where one or both parties agree not to share specified confidential information with outsiders. NDAs are the most common contract in B2B — signed before almost every sales conversation, investment discussion, job interview at a serious company, and partnership exploration.
There are two structural types:
A *one-way NDA* (also called a unilateral NDA) protects the information of one party only. Typical use: a company sharing its pitch deck with a prospective investor.
A *mutual NDA* (or bilateral NDA) protects both parties' information. Typical use: two companies evaluating a partnership, or a potential acquisition.
Key terms to pay attention to:
- **Definition of "Confidential Information"** — overly broad definitions create liability for receiving essentially any information, including things you already know.
- **Exclusions** — standard carve-outs include information already public, information independently developed, and information required by law to disclose.
- **Term** — how long the confidentiality obligation lasts. 2 to 5 years is typical; indefinite is aggressive.
- **Return or destruction** — what happens to confidential materials when the engagement ends.
- **Non-solicitation** — some NDAs sneak in non-solicitation language that prevents hiring the other party's employees.
NDAs are rarely negotiated in depth because signing one is usually the precondition for a conversation, not the substance of the deal. That also means people sign them without reading them — which is why understanding the standard pitfalls matters.