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What Is a Bad NDA? 7 Red Flags Before You Sign

Most NDAs are reasonable. The bad ones share the same handful of warning signs.

1. 'Any information of any kind'

Reasonable NDAs define confidential information narrowly — specifically marked materials or clearly proprietary data. Catch-all language is overbroad and often unenforceable.

2. Perpetual duration

Standard is 2–5 years after the relationship ends. 'In perpetuity' is a gag order — push for a sunset.

3. Hidden non-compete

A confidentiality clause that says you can't work for competitors is a non-compete in disguise. Strike it.

4. No standard exceptions

Every fair NDA carves out information that is publicly known, that you knew before, that you developed independently, or that's required by court order.

5. Tries to silence harassment

The federal Speak Out Act (2022) voids forced silence on sexual harassment and assault claims. State laws (CA, NY, NJ) go further.

6. One-sided remedies

Liquidated damages, attorney's fees only flowing one way, or injunctive relief without bond — all give the other side disproportionate leverage.

7. No carve-out for whistleblowers

Federal law protects disclosure of suspected illegal activity to government agencies. Your NDA should acknowledge this — many don't.

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Not legal advice. For informational purposes only.