Requests for NDA’s are among the most frequent inquiries that I receive.  NDA’s are commonly used, normally short in length, and serve the ostensible function of proscribing the revelation of certain information.  Most of the time, a client who asks for an NDA is on the right track, since that client is at least considering the handling of important information that has value to either the client or another party.

Sometimes, however, a party chooses to utilize a “form” NDA found on the Internet.   This act is not necessarily cataclysmic — I have found useful forms on the net; also, the party may not want to pay a lawyer to draft an NDA.

At other junctures, a party may sign another party’s NDA, perhaps as a result of either an assumption that the NDA covers both parties’ interests, or a simple lack of negotiation power.

Whether you are an actual client, or an ambitious web user, take note:  a single NDA template is not appropriate for all circumstances, and to better protect your valuable information, a properly drafted NDA is necessary.

NDA’s are worded differently depending on the intended use of the document.  For instance, certain language may be appropriate for discussions with a potential new client, but may not properly address the handling of information when evaluating a potential sale of the company. Similarly, the specific language used in an NDA might vary according to whether you are disclosing or receiving confidential information. Moreover, how the term “Confidential Information” is defined in an NDA can vary widely, as can exceptions to confidentiality obligations, the duration for which such obligations are in effect, and the remedies for breach of the agreement.  NDA’s can be very sophisticated.

An NDA is an important step in safeguarding valuable information.  Like any contract, however, an NDA is not foolproof and does not guarantee that your information will not be misappropriated or misused.  For absolutely security, you must never reveal information at all – not very practicable for business (in fact, sometimes the measured disclosure of information is customary, such as in discussions with VC’s and investors who do not normally sign NDA’s when evaluating potential investments).

My neighbor will be fine:  while I have not revealed any confidences, and have received his blessing for this note, the NDA form that he uses is the most restrictive that I have ever seen, and, presumably as a result, no one has yet agreed to sign it.

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