What an NDA Actually Means and What to Watch For

You have probably signed dozens of NDAs. They pop up in the creative industry all the time. Before discussing a project, when visiting a client office, or even just to hear a pitch. But here is the thing: not all NDAs are created equal, and some of them are far more restrictive than they appear.

What an NDA Is Supposed to Do

At its core, a non-disclosure agreement is simple. It says: "I will not share the confidential information I receive from this person or company."

The problem is that "confidential information" can be defined in very different ways, and the scope of what counts as "disclosure" can be surprisingly broad.

The Three Parts of an NDA That Matter

1. What Counts as Confidential

A fair NDA limits confidential information to specific things: trade secrets, proprietary processes, client lists, financial data, or specific ideas shared during the relationship.

A problematic NDA might include: "All information shared during the term of this agreement", which could mean even public information you already knew, or information you develop independently later.

**What to watch for:** Broad definitions of confidential information that include anything the other party decides is secret, or that extend to information you already have or will develop independently.

2. How Long It Lasts

NDAs typically have a time limit. Common terms are 2-5 years for the confidentiality obligation.

A problematic NDA might say: "Confidentiality obligations shall survive indefinitely" or "for as long as the information remains confidential", which could be forever.

**What to watch for:** Infinite or vague time limits. Even 5 years is a long time in a fast-moving industry. Push for 2 years maximum.

3. What Constitutes Disclosure

Most NDAs focus on not telling others. But some include provisions that restrict what you can do with information even without telling anyone.

For example: "Recipient shall not use any Confidential Information for any purpose other than evaluating the proposed business relationship."

This sounds fine until you realise it might restrict you from working in the same field.

**What to watch for:** Use restrictions, not just disclosure restrictions. Also watch for clauses that prevent you from hiring the other party's employees.

Common Problematic NDA Clauses

Here are the specific clauses that appear most often in NDAs that go too far:

**"All information is confidential unless marked otherwise."** This puts the burden on you to know what is secret and what is not. Fair NDAs require information to be explicitly marked as confidential.

**"Information is confidential if it would be obvious to a reasonable person."** This is impossibly vague. What is obvious to one person might not be obvious to another.

**"You cannot hire our employees."** Yes, some NDAs include non-solicitation clauses that prevent you from hiring people who work at the other company. This can seriously limit your recruiting options.

**"You must return all information on request."** This is standard, but watch for clauses that require you to destroy copies, including things stored in backup systems or cached on your devices.

A fair NDA should have a specific definition of what information is confidential, typically requiring it to be marked or designated in writing.

How to Negotiate a Better NDA

Most NDAs are not set in stone. Here is what to push for:

• **Limit what is confidential** to specifically marked information.
• **Add a time limit** of 2 years maximum.
• **Exclude publicly available information** from the definition of confidential.
• **Exclude information you develop independently.**
• **Remove employee non-solicitation** if it is included.
• **Add a "reasonable person" standard** for determining what is confidential.

When to Walk Away

Some NDAs are simply too restrictive to sign. If an NDA would prevent you from doing your job or working in your field, it is not worth signing. And remember: you can always ask for changes before signing. Most companies expect negotiation on NDAs, especially from contractors and consultants.

Before you sign your next NDA, read it carefully. And if you are not sure what it means, Clauze can help you understand exactly what you are agreeing to.