Sample analysis
This is a real ClauseAudit report on an example NDA, exactly what you get for your own.
Executive Summary
This one-way NDA is drafted to restrict you as broadly as possible. The biggest concerns are an over-inclusive definition of "confidential information" with no standard exclusions, a perpetual duration, and a residuals clause that can quietly undermine the whole agreement. It also binds only you, though information appears to flow both ways. Before signing, prioritize the definition, the exclusions, the duration, and the residuals clause, each is standard to negotiate.
Flagged Clauses
5Original clause text
“"Confidential Information" means all information disclosed by the Company, in any form, whether or not marked as confidential.”
What this means
The definition is so wide it covers almost anything you learn, including things you already knew or that are public.
Why it matters
Compared to typical
Negotiation tip
Narrow it to information actually marked or identified as confidential, and add the standard exclusions below.
Original clause text
“No exclusions from the definition of Confidential Information are provided.”
What this means
A fair NDA excludes information that is public, already known to you, independently developed, or lawfully received from a third party. These are absent.
Why it matters
Compared to typical
Negotiation tip
Insist on all four standard carve-outs, plus disclosure required by law.
Original clause text
“The obligations of confidentiality shall survive indefinitely.”
What this means
The obligation never ends. US courts often refuse to enforce indefinite NDAs, but you still carry the risk.
Why it matters
Compared to typical
Negotiation tip
Set a defined term, commonly 2–5 years for ordinary business information; trade secrets can run longer.
Original clause text
“Nothing shall restrict use of information retained in the unaided memory of Recipient's personnel.”
What this means
This lets the other side freely use anything they "remember," which can gut the confidentiality you thought you had.
Why it matters
Compared to typical
Negotiation tip
Strike it, or at minimum exclude trade secrets and anything documented as confidential.
Original clause text
“Recipient agrees to hold the Company's Confidential Information in confidence.”
What this means
Only you are bound to keep secrets, even though the relationship appears to involve sharing in both directions.
Why it matters
Compared to typical
Negotiation tip
If you are also disclosing anything, ask to make it a mutual NDA.
Recommendations
- Narrow the definition of confidential information and require marking.
- Add the four standard exclusions plus a legally-compelled-disclosure carve-out.
- Replace the perpetual term with a defined 2–5 year duration.
- Strike the residuals clause, or narrow it to exclude trade secrets.
- Make the NDA mutual if you are also disclosing information.
What This Contract Gets Right
- The agreement includes a Defend Trade Secrets Act (DTSA) immunity notice, which is a good-practice inclusion.
- The purpose of the disclosure is described specifically rather than left open-ended.
Missing Standard Clauses
- A return-or-destruction obligation for confidential materials at the end of the relationship.
- A reasonable limit on injunctive relief (including a bond requirement).
- A neutral or mutual governing-law and venue provision.
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This sample is AI-generated and not legal advice. Always consult a qualified attorney before signing any contract.