# Standard NDA Issue Checklist This checklist drives Pass 2 of the NDA review (standard-protection check). For each item, classify the document as: **Present and standard** / **Present but unusual** / **Missing** / **N/A**. The checklist is calibrated to typical US commercial NDAs. Items marked with † are particularly perspective-sensitive — the same clause language reads very differently depending on which side the user is on. See `perspective_lens.md` for how to flip the lens. ## 1. Definition of Confidential Information † What it is: the clause defining what counts as "Confidential Information" subject to the agreement's protections. What "standard" looks like: - Covers information disclosed in any form (oral, written, electronic, visual). - For unilateral-toward-discloser: defines confidential information broadly and does not require marking or written confirmation as a precondition for protection. Sometimes includes a "reasonable person would understand to be confidential" catch-all. - For mutual or recipient-favorable: may require marking, may require written confirmation of orally-disclosed information within a stated period (typically 30 days), may exclude general business information. What's unusual: - Definition limited to information "marked confidential" with no catch-all (favors recipient; problematic for discloser). - Definition extending to information *derived from* confidential information without limit (favors discloser; problematic for recipient). - Definition extending to "any information" with no qualifier (overly broad). - Asymmetric definitions in a "mutual" NDA — different scope for what each party's confidential information includes. ## 2. Exclusions from Confidential Information † What it is: the clause carving out specific categories of information from the confidentiality obligation. Standard exclusions: - Information already in the public domain. - Information that becomes public through no fault of the recipient. - Information independently developed by the recipient without use of the confidential information. - Information rightfully received from a third party without confidentiality obligations. - Information already known to the recipient before disclosure (sometimes requiring documentation). What's unusual: - Missing exclusions entirely (problematic for recipient; recipients should never agree). - Overly broad "independently developed" carveout that effectively swallows the confidentiality obligation (problematic for discloser). - "Reverse engineering" exclusion (often a recipient-favorable add; flag whenever present). - Exclusion for information disclosed pursuant to legal process *without notice* to the discloser (problematic for discloser; standard exclusions allow disclosure with notice). - Asymmetric exclusions in a "mutual" NDA. ## 3. Permitted Uses † What it is: the clause specifying what the recipient may do with the confidential information. What "standard" looks like: - Use limited to a specifically named "Purpose" defined elsewhere in the agreement (e.g., "evaluating a potential business relationship between the parties"). - Use is for the named Purpose only; any other use requires written consent. What's unusual: - Broad permitted uses (e.g., "for any purpose related to the parties' business relationship") (problematic for discloser). - Missing purpose definition entirely (problematic for both — the operative restriction is undefined). - Permitted use that includes "internal evaluation" without a defined business purpose (vague; favors recipient). - "Use" defined to exclude obvious activities like comparing with the recipient's own products (favors discloser; flag for recipient). ## 4. Permitted Disclosures † What it is: the clause specifying who, on the recipient's side, may receive the confidential information. Typical categories: - Employees with a need to know. - Affiliates / subsidiaries. - Professional advisors (lawyers, accountants, financial advisors). - Subcontractors. What "standard" looks like: - Disclosure to employees with need to know, who are bound by confidentiality obligations at least as protective as this agreement. - Disclosure to professional advisors under similar conditions. - Disclosure required by law, with prompt notice to the discloser and cooperation in seeking a protective order. What's unusual: - No permitted disclosure to advisors (highly problematic for recipient — blocks legal counsel and accountants). - Disclosure to "any person bound by confidentiality" without scope limit (favors recipient; problematic for discloser). - Required disclosure without notice provision (favors recipient; problematic for discloser). - Affiliates included without limit (problematic for discloser, especially for large-corporate-family recipients). - "Need to know" not specified — disclosure to "employees" generally (favors recipient; problematic for discloser). ## 5. Term and Duration † What it is: how long the agreement lasts and how long confidentiality obligations survive. What "standard" looks like: - Agreement term: 1–5 years (most commonly 2–3). - Confidentiality obligation duration: 2–5 years from the date of disclosure (most commonly 3 years). - For trade secrets specifically: often defined to continue "for as long as the information remains a trade secret" (this is the standard discloser ask). What's unusual: - Perpetual confidentiality on all confidential information (favors discloser; problematic for recipient — perpetual obligations on non-trade-secret information are operationally burdensome and may be unenforceable in some jurisdictions). - Very short term (less than 1 year) (favors recipient; problematic for discloser). - Confidentiality survives only for the term of the agreement, not from disclosure (favors recipient; common drafting error or aggressive recipient ask). - Term tied to a deal that may not happen ("until consummation of the transaction"); flag the gap if the deal doesn't close. ## 6. Return / Destruction of Confidential Information † What it is: what happens to confidential information when the agreement ends or the discloser requests it back. What "standard" looks like: - On request or termination, recipient returns or destroys all confidential information. - Recipient may retain one archival copy in legal/compliance files. - Recipient may retain copies on standard backup systems (with continuing confidentiality obligations). - Certificate of destruction provided on request. What's unusual: - Mandatory return (no destruction option) (problematic for recipient; impossible to fully comply with for digital information). - No retention exception for legal/compliance archives (problematic for recipient). - No backup-system exception (problematic for recipient). - Required certification within unreasonable time (e.g., 5 days) (problematic for recipient). - No return/destruction obligation at all (favors recipient; problematic for discloser). ## 7. Residuals Clause What it is: a clause stating that information retained in the unaided memory of recipient personnel is not subject to confidentiality obligations. What "standard" looks like: - Most NDAs do not have a residuals clause. - When present, scope is typically limited to general knowledge, skills, and experience retained in unaided memory. What's unusual: - Any residuals clause from a discloser perspective is problematic; flag as material. - Broad residuals clauses (e.g., covering "ideas, concepts, and know-how") effectively eliminate the protection; flag as critical from discloser perspective. - Residuals coupled with a no-license clause is the standard recipient-favorable construction; from a recipient perspective, this is the desired structure. ## 8. No-License Language What it is: explicit statement that disclosure of confidential information does not grant any license, ownership, or other rights to the recipient. What "standard" looks like: - Brief, clear statement that no license is granted by implication, estoppel, or otherwise. What's unusual: - Missing entirely (flag whenever absent; both sides typically want this). - Coupled with broad IP assignment language (flag — IP assignment in an NDA is a red flag, see `red_flags.md`). ## 9. Equitable Remedies / Injunctive Relief † What it is: clause acknowledging that breach of confidentiality may cause irreparable harm and providing for injunctive relief without bond. What "standard" looks like: - Acknowledgment of irreparable harm. - Right to seek injunctive relief in addition to damages. - Waiver of bond requirement. What's unusual: - Missing entirely (favors recipient; standard discloser ask). - One-sided availability (e.g., only the discloser may seek injunctive relief, even in a mutual NDA) (asymmetry; flag). - Waiver of damages or limitation on damages alongside injunctive relief (favors recipient). - Liquidated damages amounts (rare in NDAs; flag — see `red_flags.md`). ## 10. Governing Law and Venue What it is: choice of governing law and forum for disputes. What "standard" looks like: - A specified state's law and a specified venue (state or federal court in that state, or arbitration with seat). What's unusual: - No governing law specified (creates conflict-of-laws uncertainty). - Counterparty's home state law for both governing law and venue (negotiable; flag if user has no presence there). - Mandatory arbitration with non-standard rules (flag for recipient if a NDA breach is at issue — recipients usually prefer court for the equitable remedy access). - Exclusive venue in a hostile or inconvenient forum. - Governing law of a non-US jurisdiction in an otherwise-US deal (flag). ## 11. Assignment What it is: whether and how the agreement can be assigned to a successor entity. What "standard" looks like: - Either silent (defaults to general contract law) or restricted with consent. - Permitted assignment to successors-in-interest in a merger, acquisition, or sale of substantially all assets. What's unusual: - Free assignability (problematic for discloser — counterparty can assign confidentiality obligations to a competitor of the discloser). - Prohibition on assignment even to successors-in-interest (problematic for both sides if either may be acquired). ## 12. Integration / Entire Agreement and Amendment What it is: clause stating the document is the entire agreement and can only be amended in writing. What "standard" looks like: - Standard integration clause; amendments must be in writing signed by both parties. What's unusual: - Integration clause that purports to override prior agreements addressing the same subject (flag if user mentioned prior agreements in business context). - Oral amendments allowed (flag). ## 13. Notice What it is: clause specifying how formal notices under the agreement are delivered. What "standard" looks like: - Email or certified mail to specified addresses; typically deemed received on a specified day. What's unusual: - No notice provision (creates ambiguity for return-of-information requests, breach notifications, etc.). - Notice requirements that effectively block notice (e.g., physical mail only to a foreign address with no email option). ## 14. Counterparts and Electronic Signatures What it is: clause permitting execution in counterparts and via electronic signature. What "standard" looks like: - Standard counterparts and e-signature clause. - Missing this is rarely material (most jurisdictions allow electronic signatures by default), but it's a small flag for cleanliness.