Legal Triage Nda

When to use

Use this when an NDA arrives and someone needs a fast, consistent read: sign as-is, negotiate lightly, or send to counsel. It applies a standard rubric so NDAs don't silently pile up or get signed with hidden traps.

Not for: NDAs bundled inside a larger agreement (review the whole via legal-review-contract), high-stakes M&A or litigation confidentiality (escalate), or drafting an NDA from scratch. This triages incoming standalone NDAs only.

Method

1. Capture the basics. Parties, one-way vs. mutual, purpose, and which disclosure direction matters to us.
2. Check core terms against standard: definition of confidential information, permitted use, exclusions (public, independently developed, already known), term and survival, return/destruction, governing law.
3. Scan for red flags: non-competes or non-solicits hidden inside, IP assignment, indemnification, unlimited/perpetual duration, unusually broad "confidential" definitions, one-sided obligations on us, residuals clauses, foreign jurisdiction.
4. Classify. Decision points: GREEN = standard, mutual, reasonable term → sign as-is. YELLOW = minor deviations fixable with playbook edits → negotiate. RED = any red-flag term, IP/indemnity/non-compete, or high-stakes counterparty → escalate to counsel.
5. Recommend action matching the color, with specific edits for YELLOW.
6. Note the deadline and who owns the next step.

Example

Incoming: one-way NDA, we are the receiving party, purpose "evaluate a partnership." Core terms mostly standard, but two issues: term survives 7 years (standard is 3-5) and it includes an IP-assignment clause granting them rights to anything we create during discussions. Red flag: IP assignment. Classification: RED. Recommended action: escalate to counsel; do not sign. Owner: deal lead, deadline: before next partner call Thursday.

Pitfalls

• Skimming for the confidentiality clause only. The trap is usually a smuggled non-compete or IP-assignment term elsewhere.
• Calling a one-sided NDA GREEN. If all obligations fall on us, it isn't standard — that's at least YELLOW.
• Negotiating a RED item yourself. IP, indemnity, and non-competes go to counsel, not playbook edits.
• No deadline. An untriaged NDA that "we'll get to" blocks the deal it gates.

Output format

Parties / type (one-way|mutual) / purpose:
Classification: GREEN | YELLOW | RED
Term check table:
  | Term | Standard | This NDA | OK? |
Red flags (if any):
Recommended action: sign | negotiate (edits: ...) | escalate to counsel
Owner & deadline:

GREEN / YELLOW / RED rubric

Classify against the criteria below. When an NDA straddles tiers, take the highest tier any single term triggers — one RED term makes the whole NDA RED.

GREEN — sign as-is

All of the following hold:

• Mutual (obligations run both ways).
• Standard definition of confidential information (marked or reasonably-should-be-understood as confidential).
• Standard exclusions all present: public knowledge, independently developed, already known/rightfully received, and required-by-law disclosure.
• Term 2-5 years — or perpetual only for trade secrets, not ordinary confidential info.
• Governing law in a familiar US state.
• Mutual return/destruction of confidential info on request or termination.
• No obligations beyond confidentiality (no IP, no indemnity, no non-compete, no payment).

YELLOW — negotiate with playbook edits

One-sided but fixable, or a single non-fatal deviation:

• One-directional obligations where a mutual version is reasonable.
• Term 5-7 years on ordinary confidential info.
• Exactly one standard exclusion missing (add it back).
• Overbroad "confidential information" definition (narrow to marked/should-be-understood).
• Injunctive relief permitted without requiring a bond (acceptable but note it; push for "without waiving other remedies" balance).
• No notice-of-compelled-disclosure right (add: you'll give notice before responding to a subpoena where legally allowed).
• Non-standard but domestic jurisdiction (negotiate toward a familiar state).

RED — escalate to counsel, do not self-negotiate

Any one of these:

• Any IP assignment or ownership grant.
• Indemnification obligation.
• Non-compete or non-solicit / no-poach.
• Residuals clause that strips protection (lets them freely use "retained in memory" info).
• Perpetual term on ordinary confidential information.
• Liquidated damages / stipulated penalty.
• Foreign jurisdiction or foreign governing law.
• M&A, financing, or active-litigation context.
• Term > 7 years.
• Unlimited liability.
• Broad "no reverse-engineering" combined with actual source-code or system access.

Standard term reference

Reference

• One-way vs. mutual. If you will disclose anything at all, prefer mutual — a one-way NDA that names you as the sole receiving party puts every obligation on you. Flip a one-way to mutual as a default YELLOW edit.
• Perspective flips which terms matter. As the disclosing party you care about broad definitions, long terms, strong return/destruction, and injunctive relief. As the receiving party you care about tight scope, complete exclusions, short terms, residuals, and not inheriting IP or non-compete obligations. Read the NDA from the seat you actually occupy.
• Common smuggled traps. Watch for a non-solicit buried inside a "no-poach" or "no-hire" sentence; an IP assignment hidden inside a "work product" or "feedback/suggestions" clause; and auto-renewing or evergreen confidentiality that quietly becomes perpetual. These are the terms that turn an apparently GREEN NDA into a RED one — scan the whole document, not just the clause labeled "Confidentiality."