What is NDA Review?
An NDA review is legally reviewing a nondisclosure agreement (NDA). A nondisclosure agreement is a legal document that ensures confidentiality between two parties or legal entities.
Also known as a confidentiality agreement, an NDA restricts the type and quantity of information one party can share about another. Examples of this type of agreement include doctor-patient confidentiality, and attorney-client confidentiality are examples of nondisclosure agreements.
Many employers require new employees or freelancers to sign NDAs before working together. This ensures that the company’s intellectual property and assets are not disclosed to unauthorized parties.
NDA Review Process
Nondisclosure agreement lawyers can review confidentiality agreements to ensure that they are legally sound and fair to all parties. You should not sign an NDA if you disagree with its terms but instead be open to negotiation.
Creating a nondisclosure agreement for information should first clearly identify what confidential information parties may not disclose. For example, a business with its own trademarked methodology may require employees and contractors to sign an NDA before working with them. This ensures that their “trade secret” is not leaked to the public or shared with competitors.
Examples of confidentiality agreement information include:
- Commercial property, ideas, or patented information and trademarks
- Financial transactions and relevant information
- Joint ventures between two companies
- Any situation that involves divulging highly personal, sensitive, or confidential information that, if shared, could result in harm or disadvantage
Below are the NDA review process steps that you can follow if you wish to draw a confidentiality agreement to protect yourself or your business.
Step 1. Identify If You Need an NDA
In many cases, you can set boundaries and make requests in the workplace without requiring a contract. However, suppose you have any information or inside operations that you want to remain out of the general public. In that case, a confidentiality agreement may be necessary.
If you are being asked to sign a nondisclosure agreement, ask yourself why and what benefit it poses to the administering party. You should feel you are both on equal ground regardless of what information they would like you to keep private.
Step 2. Review or Prepare Your Contract
You can find free NDA contract templates online to modify for your needs. However, before you use any NDA contract, you should ensure that it contains all the appropriate terminology to ensure it’s both fair and legally valid.
At the minimum, every confidentiality agreement should contain the following:
- A definition of the “confidential information” that the party cannot share.
- The duration of confidentiality, i.e., how long the person may not discuss any information outlined in the contract. Generally, two to five years is the average NDA length.
- Restrictions about trade secrets and how they may be used in the future.
- The purpose of the confidentiality agreement and its benefit to both parties.
- Designated people or populations with whom the party may share information, e.g., company employees, attorneys, clients, consultants, etc.
- Circumstances information may be shared and when it should be restricted to a “need-to-know basis.”
- The relationship between the two parties in the agreement, e.g., a company and new employee, two businesses or a corporation, and how a business will merge.
- An injunction relief that states the protected party is allowed to seek a legal injunction from a court to stop the spread of further information after a breach or alleged breach of contract.
- An attorney reimbursement clause ensures that the administering party is eligible to receive reimbursement if they must take legal action to enforce the NDA.
Specifying all of the above information may feel cumbersome, especially if you have no experience drafting legal documents yourself. While you can fill out the details, it may be in your best interest to consult with an NDA attorney before having anyone sign your contract.
Here is an article that explores what to look for in a confidentiality agreement, including red flags and how to protect yourself when signing one.
Step 3. Consult With a Lawyer
At this step, you should also research nondisclosure agreement pricing. Once you find an attorney, you can ask them to draft an NDA for your confidentiality agreement or review one that you have drawn up yourself.
If you sign an NDA, a lawyer can review the document and ensure it does not contain any potentially harmful clauses hidden in legal jargon. After the NDA review process, you can request any modifications or negotiate the terms of the agreement with the issuer.
How Long Does NDA Review Take?
The NDA review process generally lasts between 1-3 days. This ultimately falls to the nature of the agreement, the level of confidentiality requested, your lawyer's availability, and any negotiations or counter-negotiations from involved parties.
Electronic signature processing can take between 1 to 3 business days when it comes to signing a nondisclosure agreement.
If both parties must be present for the signing, they may wish to do so with their attorneys present. However, this is generally only the case when large-scale businesses, such as corporations or enterprises merge or begin a joint venture.
A nondisclosure agreement review can persist for several weeks if policies require approval from other entities or legal counsel. However, NDAs between large companies or contracts that refer to highly confidential information can take longer to review. Various policies and stipulations may need to be added during the negotiation process.
What To Look for When Reviewing NDAs
Before signing an NDA, you should be mindful of the parties' confidentiality terms. This includes what information is safeguarded by the contract, restrictions to sharing it, the duration of the contract, and potential consequences for violating the agreement.
Because they are civil contracts, violating a confidentiality agreement is not an actual crime. However, breaching the terms laid out in the contract can result in severe financial penalties.
When reviewing an NDA, be mindful of the potential consequences of a breach of contract. For example, if you are the one preparing the NDA, be sure to clarify what financial repercussions a party may be held liable for, such as reimbursing legal fees.
It is also important to clarify how long information must remain secret and what details can be discussed. For example, an NDA may allow a party to reveal broad, generalized information but not share specific details in some cases.
Working with an attorney is the best way to protect yourself against any clauses that may be inserted into the agreement. Suppose the liquidated damages charge, for example, equates to an obscene amount of money per breach. In that case, you could jeopardize your well-being by signing the contract.
Negotiating a contract is a natural part of the NDA review process. This is the best way to ensure that all parties move forward with mutual trust.
Here’s an article about what you should be looking for during the NDA contract review process.
Should a Lawyer Review an NDA?
An attorney may review an NDA, but it is not always necessary. However, legal counsel is advised if you look to issue one or work with a business. Nondisclosure agreement attorneys can help you get the fairest deal and level of protection, whether you are a signer or issuer of the contract.
Types of NDAs
There are two primary types of nondisclosure agreements: unilateral and mutual. Unilateral NDAs prevent one person from sharing information about another, usually a business they work for.
On the other hand, businesses in partnerships often use a mutual NDA to protect their intellectual property and proprietary assets. In addition, joint ventures require sharing information about internal operations and practices. The mutual NDA ensures that neither company can reveal information about the other and earn an unfair advantage.
Once you have decided what type of NDA is appropriate for your situation, you can find an NDA template online or begin researching nondisclosure agreement lawyers.
Here is an article highlighting the different types of nondisclosure agreements and explaining how they operate.
NDA Review Checklist
Before submitting your NDA for review with an attorney, make sure you have the following:
- Legal right to any information or assets you wish to keep confidential.
- A clear definition of your confidential information.
- Approval from all involved parties to negotiate an NDA.
- A specified purpose for the agreement.
- A list of all parties involved.
- The specified time frame, i.e., how long confidentiality must be maintained.
- Included and excluded content from the agreement.
- Jurisdiction over the contract, i.e., what states or government will oversee any potential disputes.
- Criteria for a breach and detailed repercussions in the event one occurs.
NDA Review Services
ContractsCounsel can help with a one-off NDA review or enterprise NDA review services. For example, a nondisclosure agreement is one of the most common legal contracts a business may encounter. In addition, some businesses and legal departments are required to review a lot of NDAs.
The ContractsCounsel platform can connect you with a business lawyer that has experience reviewing NDAs in your industry. We can arrange for flat-fee and hourly pricing to help you set up a scalable and cost-effective process.
Post a project in ContractsCounsel’s marketplace to get flat fee quotes from lawyers to help you with your NDA review needs. All lawyers are vetted by our team and peer-reviewed by our customers for you to explore before hiring.
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