What to Know About the NDA Negotiation Process: Tips, Strategies, and Legal Assistance
Signing an NDA (Non-Disclosure Agreement) can sometimes feel stressful. These contracts are legally binding and can have significant consequences if their terms are violated. Although you might think you have to agree to and sign an NDA when receiving it, there is room for negotiation.
Read the rest of this article to explore what an NDA typically contains and what to look for so you can negotiate some of its terms. We’ll also feature when it’s advisable to consult a qualified lawyer for assistance with the negotiation process.
What’s in an NDA?
An NDA can be unilateral, in which one party shares information with the receiving party, or mutual, in which both parties share information. This contract usually contains some important information related to the following:
- Confidential information. The agreement specifies what information is protected, such as trade secrets or technology that will be used during a work project.
- Uses. It should be clearly stated how the receiving party is allowed to use the information they receive and how they must protect it.
- Duration. The agreement will run for a specific amount of time, which must be specified.
- Post-termination obligations. This section of the document explains how the data or information should be handled by the receiving party when the contract comes to an end, such as if it should be destroyed or returned.
- Remedies. If the contract is breached, there will be specific consequences, such as penalties or legal action taken against the offending party.
How Can You Negotiate Terms in an NDA?
When receiving an NDA, you should take the time to read through it and carefully review it so that you are sure you understand everything. There are some specific things to look for so that you can discuss the points with the other party and get a better deal.
Get Clarity About the Information
Sometimes, negotiation is really about clearing up any confusion in the document so that both parties are satisfied with what’s being outlined.
The NDA should provide clear instructions on what information needs to be protected. If it’s vague, the receiving party will want to seek clarity, such as by suggesting any exceptions to the rule or how to treat information that’s already in the receiving party’s possession.
Rethink Non-Compete Clauses
In some cases, an NDA contains non-compete clauses that prevent the receiving party from developing similar goods or services to those of the disclosing party. While this might seem reasonable, it’s not common for the receiving party to have to agree to non-competes. At the very least, they should negotiate for them to be reasonable and not too restrictive.
Set a Duration
In some cases, the NDA might not mention how long the receiving party isn’t allowed to disclose the information. This can result in one being locked into the contract indefinitely. It’s best to ask for a shorter term that’s no longer than two years.
Check the Purpose
The NDA should clearly define the purpose for the information so that there’s no risk of accidentally breaching the agreement. You should push for specific explanations from the other party.
Focus on the Most Important Points
Instead of trying to change every point in the NDA, which can put the other party on the offensive, you should focus on what’s most important. Generally, these include the duration, scope, and liability.
Provide Reasons
Whatever you wish to change in the NDA, back it up with a sound explanation. For example, if you want to revise the duration of the NDA, you could explain how indefinite obligations put you at risk.
Suggest Clear Edits
Instead of merely flagging clauses you’re unhappy with, you should provide more specific or clear clauses. This is a constructive way to get a more favorable outcome.
For example, if you’d like to change a clause that states you have to return all information after termination immediately, which sounds too vague and broad, you could rephrase it as, “The recipient shall use reasonable efforts to return all confidential information, except for copies as required by law or internal compliance policies.”
Do You Need a Lawyer to Negotiate an NDA?
Although you might feel confident to review and negotiate your NDA, such as if it’s simple and straightforward, there are good reasons to consult a lawyer for guidance and help with the process.
Once you’ve identified any clauses that don’t feel right, such as if they’re too restrictive, your lawyer will help you to negotiate your NDA in the following ways:
- They’ll notice any hidden risks that you might miss.
- They’ll explain how the information can and can’t be used, providing you with clarity.
- They’ll protect you against any future consequences that could harm you.
- They’ll unpack legal jargon and complex wording that can make it challenging to understand all the finer details of the contract.
- They’ll negotiate on your behalf by knowing how to push back on any sections that are harsh or broad, and when to settle.
- They’ll consider your priorities so that they negotiate with your best interests in mind.
- They can rewrite the NDA for clarity, helping you to avoid uncertainty or costly mistakes.
Where Can You Find a Lawyer to Help You Negotiate an NDA?
If you need to hire a lawyer to help you negotiate your NDA, you might wonder where to find one who’s experienced, qualified, and ready to assist you. Online legal platforms make this task easier than it used to be.
One of the largest online legal marketplaces is contactsCounsel. This platform puts you in touch with over 1,000 lawyers who are experienced in reviewing NDAs and have been vetted on the platform.
You can choose the best lawyer for your legal requirements according to data provided by the platform, such as their field of expertise, years of experience, location, and reviews from clients for previously completed projects on the platform. This makes finding and hiring a lawyer a stress-free experience.
