A Non-Disclosure Agreement (NDA) is one of the simplest yet most important contracts businesses rely on to protect the information that gives them an edge: whether that information is technical, financial, strategic, or simply not meant for competitors. NDAs appear everywhere: from early investment conversations and due diligence processes to employment negotiations and collaborations between companies. When drafted well, an NDA can prevent misunderstandings, limit legal exposure, and keep commercial discussions on track.
At Karimi & Associates Law Firm, we regularly review NDAs drafted by companies in different industries. Our experience has shown that many confidentiality agreements fail not because the idea is flawed, but because key elements are missing or drafted too generally. Those gaps are exactly where most breaches occur. If you want your agreements to withstand real-world business risks, our contracts team can review them and help you close those weak points.
Below are the core elements that make an NDA strong and enforceable. Leaving them out significantly increases the chances of the agreement being challenged or ignored entirely.
Clearly define what counts as “Confidential Information”
Everything in an NDA depends on this part. If the definition is vague, the rest of the agreement loses its effectiveness. A clear definition should provide concrete examples of the types of information the parties are trying to protect, such as financial records, customer lists, business plans, prototypes, algorithms, and internal reports. It should also cover every format the information might appear in, including written documents, emails, oral discussions, presentations, samples, or digital files. Most importantly, a strong NDA includes a short catch-all phrase that covers any information a reasonable person would understand to be confidential, even if it is not explicitly listed. In practice, it is helpful to mark written documents as “Confidential” before sharing them, and for verbal disclosures, it is wise to send a follow-up written confirmation to ensure there is no doubt about what was intended to remain private.
Identify what is not confidential
A well-balanced NDA also defines what is excluded from confidentiality. This prevents the agreement from being unreasonable or unenforceable. Exclusions commonly include information the recipient already possessed before the agreement (with proof), information that becomes publicly available through no wrongdoing, information independently developed by the recipient without using disclosed materials, and information obtained legally from a third party. Clearly stating these exclusions protects both parties and adds credibility to the agreement.
Explain why the information is being shared
An NDA should clearly state the reason the receiving party is allowed to use the information. For example, it could specify that the information is being shared solely for evaluating a potential business partnership. By defining a single, specific purpose, the agreement prevents the recipient from using confidential information for unrelated activities or competitive advantages. It is also important to specify which internal individuals may access the information, such as employees, managers, or professional advisers who genuinely need it.
Outline the receiving party’s obligations
The NDA should spell out the recipient’s responsibilities to avoid misunderstandings later. These obligations typically include protecting the information with at least the same level of care used for their own confidential material, sharing it only with individuals who have a legitimate need to know, and ensuring that advisers, consultants, or contractors are bound by similar confidentiality duties. Clear language in this section ensures both parties understand what is expected and makes it easier to enforce the NDA if a breach occurs.
Set a reasonable confidentiality period
The NDA should specify how long the recipient must keep the information confidential and how long the agreement’s obligations last. In most business contexts, this period ranges from two to five years. For highly sensitive material, such as trade secrets, confidentiality may continue indefinitely, or at least “for as long as the information remains a trade secret.” Clearly defining the duration helps both parties understand the time frame of their obligations.
A strong NDA is more than a formality; it is a practical tool that protects the ideas, processes, and strategies that distinguish one company from another. To be effective, it should be tailored to the industry, the nature of the information, and the goals of the parties involved. NDAs are not limited to technology or inventions; they are equally relevant for client relationships, pricing strategies, business models, workforce information, and any other aspect that defines a company’s competitive advantage.
If you want to ensure your agreements genuinely protect your business, our team at Karimi & Associates Law Firm is ready to assist. We help companies identify vulnerabilities, strengthen their confidentiality frameworks, and draft NDAs that hold up when it matters most.