Non-Disclosure Agreement (NDA) FAQ

An NDA is a contract where one or both parties agree to keep certain information confidential. It protects trade secrets, business plans, customer lists, technical data, and other sensitive information from being shared without permission. NDAs are also called confidentiality agreements.

A mutual NDA protects confidential information shared by both parties — both give and receive protection. A one-way NDA protects only one party information. Use mutual NDAs for partnerships and negotiations; use one-way NDAs when only you are sharing sensitive data.

You need an NDA before sharing confidential information in situations like partnership discussions, investor meetings, hiring contractors, vendor evaluations, M&A negotiations, or any scenario where sensitive business information will be exchanged.

Yes. NDA (non-disclosure agreement) and confidentiality agreement are different names for the same type of contract. Some industries prefer one term over the other, but the legal effect is identical.

With Pactlio, NDAs start at $19 (or free for your first contract). Lawyer-drafted NDAs typically cost $200-$1,000+. The cost depends on complexity, customization, and whether you need legal review.

Every NDA should include: (1) clear definition of confidential information, (2) obligations of the receiving party, (3) standard exclusions (public info, prior knowledge, independent development, legal disclosure), (4) term and duration, (5) remedies for breach, and (6) governing law.

Standard exclusions carve out information that: was already publicly available, was already known to the receiving party, was independently developed without using confidential information, or must be disclosed by law or court order. These exclusions are essential for enforceability.

It depends on your jurisdiction. In California, non-compete clauses are void. In many other states, they are enforceable if reasonable. If you include one, it should be limited in time (1-2 years), geography, and scope. Consider using non-solicitation clauses as a less restrictive alternative.

Available remedies typically include injunctive relief (court order to stop disclosure), monetary damages for losses caused by the breach, and in some jurisdictions, recovery of attorney fees. The NDA should specify the available remedies and dispute resolution process.

Most NDAs last 2-5 years for the agreement term, with confidentiality obligations surviving 1-3 years after termination. Trade secrets may warrant longer or indefinite protection. The duration should match how long the information remains sensitive.

Yes, properly drafted NDAs are enforceable. To be enforceable, an NDA must have clear definitions, reasonable scope, adequate consideration, and be properly signed by both parties. Overly broad or vague NDAs may be difficult to enforce.

Enforcement across borders is more complex. Choose a governing law and jurisdiction, and include a dispute resolution mechanism. NDAs governed by well-established legal systems (US, UK, EU) are generally enforceable through international arbitration or treaty-based recognition.

NDAs typically expire at the end of their term. Before that, you can negotiate a mutual release, or the NDA may terminate automatically under certain conditions specified in the agreement. You generally cannot unilaterally exit an NDA without the other party consent.

Choose the jurisdiction most connected to the transaction — typically where the disclosing party is headquartered or where the primary business activity occurs. Common choices include Delaware, New York, California (for US), England and Wales (for UK), and the location of the party with the most to protect.

Not necessarily. A well-drafted NDA with appropriate governing law and dispute resolution clauses can work across borders. However, if you frequently deal with a specific country, consider jurisdiction-specific provisions that address local requirements (like stamp duty in India or GDPR in the EU).

Yes. After generation, you can edit any section, adjust terms, change the duration, and modify definitions. The AI can also help you make specific changes based on your feedback.