5 Red Flags to Check Before You Sign an NDA
Non-disclosure agreements are the highest-volume legal document after job offers. Most are routine — but watch for these five clauses that shift real risk onto you.
1. An overbroad definition of "Confidential Information"
If everything shared "in any form" is confidential with no narrowing, you can be on the hook for information you didn’t even realize was protected.
2. Missing standard exclusions
A fair NDA excludes information that is public, that you already knew, that you developed independently, or that you’re legally compelled to disclose. If those carve-outs are missing, push to add them.
3. Perpetual duration
Confidentiality that never ends is hard to enforce for ordinary business information (trade secrets are different). A defined term — often 2–5 years — is more reasonable.
4. A residuals clause
A "residuals" clause lets the other side use anything their people remember — effectively letting them reuse your ideas legally. Treat this as high risk.
5. One-sided obligations
Watch for no return/destruction obligation, waivers of your right to contest an injunction, and a venue far from where you live that makes any dispute expensive.
Don't guess — check your actual contract
Upload your nda contract and our AI will flag the risky clauses in plain English, tuned to your state, with a downloadable report and redline.
This guide is general information from ClauseAudit, not legal advice. Laws vary by state and change — consult a qualified attorney for your situation.