10 Questions to Ask Yourself Before Signing a Non-Disclosure Agreement


In today's technological advancements, NDAs are very important for businesses. They ensure that confidential data shared during business relationships remain secure. An NDA should also contain provisions regarding confidentiality, ownership rights, and usage of proprietary materials.

An NDA is a document that protects both parties involved from potential risks arising out of sharing confidential information. Both parties sign it before they start working together.

It doesn't matter whether you're dealing with a big corporation or a small start-up; intellectual properties like trade secrets or any other intellectual properties could be of utmost importance for keeping together the integrity of the business days and relationships.

What is an NDA?

In simple terms, the basic definition or NDA meaning is Non-Disclosure Agreement which is a legal counsel agreement that establishes a legally binding, confidential relationship, prohibits one party from revealing certain details, and requires the other party not to reveal them.

Employers will often require employees to agree to a Non-Disclosure Agreement (NDA) because it allows them to operate at a higher level with less risk. A Functional NDA is catalytic for free-flowing confidential information within a business, vital for maximizing profits and efficacy without the fear of that information being publicly available. Confidential and proprietary information that businesses aim to keep secret include; client lists, technologies, proprietary relationships, marketing and design strategies, and various other business secrets. Understand that your employers are not asking you to agree to an NDA out of mistrust; they are asking you to do so because it is essential to operate business days smoothly and efficiently.

Whether you're an everyday office worker or a Booze Allen Hamilton employee, you'll probably need to sign an NDA sometime soon. So next, when you're asked to sign one, you should be ready for it. Make sure you understand what it means before signing it.

NDAs Are Not One Size Fits All

NDAs protect confidential information from becoming publicly known.

It limits what people can see or know about your company.

There are four main types of non-disclosure agreements:

  1. A waiver agreement between two companies for each to disclose confidential information.
  2. A waiver agreement between one company and its employees protects employees from disclosing confidential information.
  3. A waiver agreement between two individuals who want to protect their personal information.
  4. A waiver agreement between two people who want to protect their professional information.

The Most Common NDAs

You're likely to be asked to signing an NDA agreement. So here are some of the most common types of NDAs:

Basic NDA: A basic NDA uses boilerplate (generic) wording and states that the parties involved will not share any personal or financial information during their collaboration. You may not always find additional provisions or tricky wording here, but that doesn't mean you don't need to look for them.

Employee NDA: Most companies require their staff to agree to non-disclosure agreements (NDAs). These are usually standard forms that most companies use. They often include provisions for non-competition and nondisparagement clauses. It's important to examine these carefully before signing them.

Financial NDA: When a third party receives financial information, these are often used. These are commonly encountered when working with bookkeepers, bookkeeping services, and accounting firms. They require the third party to keep any financial information confidential. This is one of the only instances where an indefinite period for an NDA is acceptable: no amount of lapse of timing makes it okay to share your bank account's number.

A Merger/Sale NDA: This type of NDA is often used when two companies merge or sell each other. It usually comes before the deal, so both parties know their agreement.

10 Things to Consider Before Signing a Non-Disclosure Agreement

An NDA is a legal counsel binding agreement restricting your ability to disclose certain information. They're most often seen in the workplace but can be signed by anyone regardless of their job title.

Many employers provide an NDA to new hires. This document contains information about what you can and cannot do after leaving the company. Before signing an NDA, ask these 10 questions. 

1. Parties to the agreement

A non-disclosure agreement (NDA) should identify the parties to an waiver agreement the disclosing party, and who the recipient is. Also, the names and contact details of the parties should be mentioned.

The non-disclosure contract should also include any other people involved in the project. These might be investors, attorneys, accountants, or others.

2. What are the Consequences of Breaching an NDA?

Some non-disclosure agreements include unpleasant consequential penalties if you breach them. Consequentials can range from terminating your employment to financial penalties. If the disclosure occurs after your employment has ended, you and whomever the disclosure was made to, including a new employer, might be sued.

If you're asked to sign an NDA, you might be asked to pay the penalty if you violate certain contract terms. An example could be paying a fine if you breach the agreement by sharing confidential relationship or information with someone else.

Use information covered by an NDA for any purpose outside your current job. You may be subject to legal action and even a legal case.

3. Do you Need One/Will the Other Party Sign?

Most negotiation situations don't require NDAs; however, there are some instances where the recipient might want one, but the sender doesn't mind if they don't sign one.

Refusal to enter joint ventures because one party wants to control the partner's future business relationship or investments is usually justified.

Suppose you present or negotiate an NDA at a too early stage. In that case, it may seem overly paranoid or detrimental to a nascent working partnership.

If you're using an NDA, then there are some things you can do to protect yourself. For example:

  • Marking documents and disclosure requirements as confidential.
  • Making clear (verbally) that the confidential business/financial/personal details which are likely to be revealed are confidential.
  • Limiting - the amount of information given.

4. Does the NDA Clearly Define What Information is Confidential?

Next up, after defining what constitutes confidential or proprietary material, are the document's definitions of what is free to share, what is confidential, and what is proprietary? Essentially, what material can be shared freely, what material must remain private, and what material belongs to both parties?

Make sure there are clear distinctions between what is and isn't confidential. Confidential information must include specific details about projects, processes, and teams.

Be specific about your definitions. For example, if the confidential data protected under an NDA is defined as "all potentially sensitive data," you know exactly what you're allowed to say. Also, avoid vague statements like "anything" or "everything. "You don't know what you can and cannot disclose.

5. What steps will be taken if you violate the NDA?

Before signing an NDA, clarify exactly what the confidentiality agreements covers about copyright infringement confidential information.

If you break any part of the non-disclosure agreement, we may take legal action against you.

When looking at an NDA, your first step is to examine what both parties will do if there is a breach.

Send a cease and desist letter: Once the injured person has signed an NDA outlining their rights and obligations under the agreement, they must follow these guidelines:1) Notify the company immediately if there is any suspicion of the breach.

This is the first step an injured party will take when violated by another party. It informs you that they may be breaking their Nondisclosure agreements (NDA) and must stop doing so immediately. If they do, that's typically the end of it.

If there's no monetary compensation for damages clauses of contract, settle out of court by agreeing to an NDA that outlines the terms of the agreement.

Settle out of court: Many businesses and companies don't want NDAs to be enforced by courts because they introduce more chances for breaches of confidential information. Think about every law firm or lawyer, paral­egal, assistant, messenger, juror, or courtroom official now accessing your business' secrets - hardly ideal.

Injunctions and temporary restraining orders: A temporary restraining order (TRO) is a legal action taken by a party who believes another party's actions may harm them. It prevents the party accused of harming them from continuing their harmful activities until a hearing can occur.

Suppose you've violated an NDA and been notified. In that case, you should immediately seek legal counsel and check any relevant liabilities you or your company may have. You should also check the original NDA and review any accusations against your responsibilities.

6. Can I negotiate the terms of a Non-Disclosure Agreement?

Yes. You may negotiate the terms of a non-disclosure agreement (NDA).

If you cannot agree with the company regarding the terms of their non-disclosure agreement (NDA), they might choose someone else who doesn't mind the terms.

You can usually request to change something if you're not comfortable with the language. If your requests are denied, consider whether it bothers you enough to go through the trouble of quitting. Companies that require you to agree to an NDA after accepting a job offer may be more willing to accommodate reasonable changes.

7. How Secure is your Signature?

You should ask the drafting parties about these important legal issues as soon as they agree to draft the contract.

Signing an NTA in-office: Does the NDA electronic signatures need to be witnessed by a third party, such as financial statements or notarized document? The NDA should include that. Social distancing may affect the viability of office-based signings, of course. In-office signatures are just as protected as those who carry them, so ensure your NDA is being signed properly.

Signing an NDA with an electronic signature: Electronic signatures (eSignatures) are now just as legal as traditional handwritten signatures. You can use them for contracts, agreements, and any financial statements or documents requiring a signature. Check your local law firm to see if it is allowed.

Electronic signatures are surprisingly secure—another benefit of going digital. And by sending digital files instead of paper ones, you're less likely to misplace them or forget where they are.

A digital wet signing allows for the use of a traditional pen and paper to sign financial statements or documents online.

8. What happens when an NDA goes wrong? (or could an NDA have unexpected consequences?)

Like any legal agreement, NDA business agreements can be torn apart, misinterpreted, or held to rigid interpretations, depending on the court, the lawyers, and the arbiters or judges involved in the case.

Not All NDA breaches involve stealing secrets. Recently, ZeniMax Media Inc. was granted $500 million by the court after suing Facebook's Oculus VR division for an NDA violation. However, the judge ruled that Oculus VR did not violate its NDA agreement with ZeniMax. In addition, the judge also ruled that Oculus VR violated the company's copyrights and falsely designated their products as "Oculus Rift" rather than "Rift S."

Being protected by law firm doesn't protect you from breaching an NDA. For example, a legally protected whistleblowing employee was still fired by AT&T after revealing security breaches at AT&T. Mark Klein broke the NDA after discovering that the US National Security Agency accessed AT&T customers' information. Even though he was legally justified in reporting this, he was fired by AT&T for breaking the NDA.

Confused intentions can trump an NDA. Confused intents and muddy contracted clauses recently reversed an NDA judgment that favored one party. Two companies involved in specialized farming gear, Loftness and Twistmeyersand Associates Inc (TAI), entered into an agreement in which Loftness would manufacture grain bagging gear based on TAI's input. The NDA attempted to define TAI's confidential info. Still, it did so in an extremely vague manner, which effectively allowed the NDA to void itself regarding the law firm and lawsuit.

The definition of "Confidential Information" includes any information that TAI considers to be its property.

9. What is the Scope of the Non-Disclosure Agreement?

An NDA will typically ask you not to disclosure requirements certain specific information. However, an NDA might be too broad for you to work on at some point in the future.

You shouldn't include anything in an NDA that isn't covered by broad language. For example, if you're concerned about certain proprietary software or technology, look for broad language that covers everything from the

  • Available publicly
  • Information you know yourself or have heard from others before starting your job.
  • Data was obtained from a third party that isn't related to the company requesting the NDA.

NDAs are not always legally enforceable. If they are too broad, it could mean that the company doesn't care enough about the waiver agreement to enforce it. If they're too narrow, the company thinks carefully about the agreement's content before signing it.

Once you've severed any connection with the company, you may be able to retain some of the information for longer than if you were working for them directly.

10. Are there Additional Clauses in your NDA?

Depending on the NDA, some may include additional clauses you should consider carefully before signing. You might want to get them reviewed by an attorney first.

  • Non-solicitation clauses are usually involved when a shared project, merger, or acquisition is involved. They prevent either party from hiring employees from the other party, contacting its clients, or doing anything else that might be considered poaching.
  • If you're going to be sued for something, check that the jurisdiction where the law firm would take place has an easy access system, that it's not too far from your current residence, and that there aren't any peculiar laws or regulations that might unfairly affect you.
  • Both sides must sign an NDA before sharing any confidential information.

Advantages and Disadvantages of Having an NDA

One main benefit of NDAs is that they keep any sensitive information about your business relationship. It could include R&D, patent negotiations, financing, etc.

NDAs (Non-Disclosure Agreements) are also clear. They state what and what cannot be shared to avoid any confusion. Non-disclosure agreements can also be made at a low cost as they are just an agreed piece of paper. This method is one of the cheapest methods to keep private information.

NDAs also outlines the consequences of breaching them, which should prevent breaches. Furthermore, they're a good way to maintain comfort and confidence in relationships.

An NDA agreement can start on the wrong foot and create some unwanted tension between two parties. It can also prevent top-level employees from working for your company if they know they cannot discuss their current job without violating an NDA.

Similarly, asking current staff members to sign non-disclosure agreements (NDAs) when working on special assignments may cause them to be less trusting of the company. NDAs can also lead to legal issues if violated, creating headaches for everyone involved.


  • Private information
  • Clarity on what information can be shared and what cannot be shared.
  • Cheap
  • Outlines consequences


  • You can't create an environment of distrust.
  • risk of losing top-tier employees
  • It could damage the relationship with your current staff.

How to Sign an NDA with eSignature Software?

You can sign an NDA using a trustworthy electronic signature service such as eSignly.

You can use the service to sign PDF files securely online, which saves time and costs.

Here is a step-by-step guide on e–sig­n an NDA online using eSignly.

#How to Self-Sign an NDA Document

When a company asks you to agree to its non-disclosure agreement (NDA), you can use eSignly to email them an electronic signature, so they know you've read and agreed to the terms.

  1. Go to the eSignly PDF signature tool.
  2. Sign and upload the NDA (non-disclosure agreement) that needs to be signed
  3. You can click on the "Signing Options" button to sign up for an account using just your email address.
  4. Click "Customize" so that you can customize your signature.
  5. Select the signature type from the Signature options, then click on the Signature box to add it to the financial statements or docu­ment.
  6. Click and drag your signature into place.
  7. After finishing, click on the "Sign" button.
  8. Click the "Download" button to get your signed NDA.

#How to ask a party to sign your NDA?

You can use an NDA template to collect one or multiple parties' names for signing.

  1. Upload your NDA document from any location where you can access it.
  2. You'll see a pop-up when you click the "Request Signature" button.
  3. Click on "Add Recipient" if you want more people to be able to sign the financial statements or document.
  4. You can change your email signatures in the settings. For example, you can add your logo.
  5. To create your custom signatures, choose your preferred type from the list, then drag and drop it into the appropriate location.
  6. If you need to add additional text boxes, go ahead and do so. Then, click on the "Send To" button.
  7. You can now see which requests came through your eSignly account from your inbox.

What do I Need to Consider When Choosing an e-Signature Service?

Suppose you're dealing with a contract of significant legal importance, such as an NDA. In that case, you may need additional trust features in the signing procedure to ensure the legal soundness of your agreement.

There are several electronic signatures services available online, so to help you choose the right service for your needs, here is some advice:

Signature Type

There are different kinds of electronic signatures. Some e-signature applications allow you to use a simple digital signature, which is just as legally binding as a handwritten signature on paper.

There is a more advanced version of digital signatures called Digital Signatures. They use a Digital Certificate from a trusted service provider and a qualified timestamp to prove the financial statements or document was signed at a certain time. These types of digital signatures are recommended for signing NDAs.

The Key Takeaway

You should ask these questions to help you understand your NDA and, ideally, get some legal guidance before signing anything.

It might be time to hire an attorney to protect yourself if you see anything tricky-looking regarding legal jargon.

And even if you're not under an NDA, misappropriation of a company's proprietary information may still be prosecuted.

That's one reason why it's so important to be aware of non-compete agreements and your local legalities before you start working for any company.