What is an NDA and when do I need one?
A non-disclosure agreement (NDA) is a contract between parties that prohibits one or both sides from sharing confidential information with outsiders. You need one before sharing a business idea with an investor, hiring a contractor, entering a joint venture, or disclosing trade secrets.
Do I need a lawyer to draft an NDA?
No. An NDA is a standard contract governed by state contract law. You need clear language defining what is confidential, who must keep it secret, for how long, and what happens if it is violated. uplaw.ai generates a legally sound NDA based on your specific situation at no cost.
What is the difference between a one-way and mutual NDA?
A one-way (unilateral) NDA protects only one party's information — used when you are sharing secrets with a contractor or vendor. A mutual (bilateral) NDA protects both parties' information — used in partnership or M&A discussions where both sides share confidential information.
What must be included in an NDA to make it enforceable?
An enforceable NDA must identify the parties, define "confidential information" specifically, state the obligations of the receiving party, specify the term (duration) of confidentiality, list exclusions (information already public), and describe remedies for breach — typically injunctive relief plus damages.
How long should an NDA last?
Most NDAs run 2–5 years from signing. Trade secrets can be protected indefinitely under the Defend Trade Secrets Act (DTSA). Employment NDAs tied to ongoing employment typically last the entire employment period plus 1–3 years after termination. Overly long NDAs may be unenforceable in some states.
Does an NDA need to be notarized?
Notarization is not required for an NDA in any US state. Both parties simply sign and date the agreement. Dating is important — it establishes when the confidentiality obligation begins. Keep signed originals in a secure location.
What happens if someone violates an NDA?
If someone breaches an NDA, you can pursue injunctive relief (a court order stopping further disclosure), compensatory damages, and in some cases liquidated damages if specified in the agreement. File a civil complaint in state court. Under the federal DTSA, you can also sue in federal court.
Can an NDA be used to silence whistleblowers or illegal activity?
No. NDAs cannot prohibit reporting illegal activity to government agencies. Under the DTSA and SEC whistleblower rules, employees can report potential violations to the government even if an NDA says otherwise. Courts regularly void NDA provisions that purport to silence illegal-activity disclosures.
Are NDAs enforceable in California?
California strongly disfavors NDAs in employment contexts and limits post-employment non-competes under Business & Professions Code 16600. However, California does enforce trade secret NDAs under the California Uniform Trade Secrets Act (CUTSA). Keep California NDAs narrowly tailored to specific trade secrets.
Can I use an NDA to protect a business idea before pitching investors?
Yes, but most sophisticated investors will refuse to sign an NDA before initial meetings. Pitch only the overview initially. Request an NDA before sharing specific financials, proprietary technology, or detailed business plans. uplaw.ai drafts an investor-appropriate NDA that is narrow enough to be accepted.
What is the difference between an NDA and a non-compete?
An NDA protects confidential information and trade secrets. A non-compete prohibits the signing party from working for competitors or starting a competing business for a defined period and geography. Non-competes face heavy legal scrutiny and are banned in California, Minnesota, North Dakota, and increasingly other states.
What should I do if I am asked to sign an NDA by my employer?
Read it carefully to understand what information is covered and how long confidentiality lasts. You can negotiate narrower definitions of "confidential information," shorter durations, and explicit carve-outs for general skills and knowledge. Counter-sign the revised version and keep a copy.
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