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NDA and confidentiality clauses explained

Much confidentiality risk is not the promise to keep secrets. It is how long the promise lasts, and how much it covers. This guide reads one from a real agreement filed with the SEC.

What it costs

Ten years, or 120 months, after the agreement ends, this clause still applies.

Assumes a look ahead of ten years. The clause itself has no end date, and the first term in section 6 is three years. An illustration, built on the assumptions stated here.

The clause, from a real filing

5.1 Confidential Information; Disclosure

“Confidential Information” means any and all confidential and proprietary information disclosed by a Party (the “Disclosing Party”) to the other Party (the “Receiving Party”), regardless of the means of communication, directly or indirectly, in writing, electronically, orally, by inspection of tangible objects, or whatever other form transmitted. … or that reasonably should be considered confidential or proprietary under the circumstances of disclosure. … The Parties’ obligations of confidentiality under this Agreement shall survive the termination or expiration of this Agreement in perpetuity, and shall be in addition to, and not in place of, any other non-disclosure and/or confidentiality obligations that the Parties may otherwise agree upon.
Master Pharmacy Services Agreement, Exhibit 10.24, CIK 1088856, Form 10-K, filed with the SEC on February 24, 2026. Read the original on SEC.gov
  • High risk

    A duty with no end date

    The duty to keep secrets survives the agreement in perpetuity. The clause does list exceptions, such as information that was already public when shared, but not information that becomes public later. Each side must return or destroy copies, but may keep one. The risk is the missing end date, and a definition wide enough to reach unmarked information.

The change to ask for

Before: The Parties’ obligations of confidentiality under this Agreement shall survive the termination or expiration of this Agreement in perpetuity, and shall be in addition to, and not in place of, any other non-disclosure and/or confidentiality obligations that the Parties may otherwise agree upon.

After: The Parties’ obligations of confidentiality under this Agreement shall survive the termination or expiration of this Agreement for three (3) years, and for any trade secret for as long as it remains a trade secret, and shall be in addition to, and not in place of, any other non-disclosure and/or confidentiality obligations that the Parties may otherwise agree upon.

Suggested language to discuss, not legal advice. Three years is an example.

Before you sign: confidentiality

  1. Find the clause. It may sit under Confidentiality, Non-Disclosure, or Proprietary Information.
  2. Check how much it covers. Words like "any and all," or "should be considered confidential," reach information nobody marked.
  3. Check how long it lasts. Look for a number of years, or for words like "in perpetuity" and "indefinitely."
  4. Check the exceptions: information that is already public or becomes public, already known to you, received from a third party, or developed on your own, and disclosure required by law.
  5. Check what happens at the end: whether you must return or destroy the information.
  6. Check that it lets you report possible violations of law to a government agency. Federal law protects many of those reports.
  7. Ask for a set number of years, with trade secrets covered only while they stay secret.
Open the one-page checklist to print
Transcript
  1. 0:00Much of the risk in an NDA is not the promise to keep secrets. It is how long, and how much.
  2. 0:06It comes from a services agreement filed with the SEC.
  3. 0:10The duty covers all confidential information, and it has no end date.
  4. 0:14It binds both sides, even for what nobody marked.
  5. 0:18The first term is three years, then it renews yearly. Ten years after the agreement ends, the clause still applies.
  6. 0:25Three things decide whether this is fair. How long does it last? What does it leave out? And is the information returned at the end?
  7. 0:33Ask for a set number of years, with trade secrets covered while they stay secret.
  8. 0:38Mark what you share, and keep a record of when you shared it.
  9. 0:42A BeforeJD read marks a clause like this, explains it in plain English, and writes the change to ask for.
  10. 0:49It also drafts the email that asks for it.
  11. 0:53Check your contract for this clause.
  12. 0:55Your first read is free.

Keep reading

Check your contract for this clause.

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BeforeJD is not a law firm. This is informational only, not legal advice.