By now, I’m sure you’ve heard of oneNDA.

It’s an attempt by lawyers to create the world’s first standard NDA—a single contract that everyone would use to protect confidentiality at the beginning of commercial transactions. The aim is to eliminate the need for multiple NDAs and the time that goes into drafting and negotiating them.

I’ve had a look at oneNDA. It’s cute. While I support moving towards a single NDA (and the time and cost savings), their current version doesn’t solve all the risks robust NDAs avoid. 🤷🏽‍♂️

I believe robust NDAs are easily accessible, efficient, and risk-aware. And there needs to be a balance between these factors. In other words, you can’t compromise risk-awareness for the sake of efficiency and accessibility.

This post is for you if you’re wondering whether to adopt oneNDA in its current state. In brief, I give you three reasons why you shouldn’t.

Reason #1: A false sense of standardisation and time saving

While oneNDA boasts standardisation and generous time-saving, ultimately, their NDA doesn’t live up to these promises.

I draw this conclusion from multiple factors, most specifically:

  • They suggest the user will need to assess whether the NDA is appropriate for a particular transaction.
  • Practically speaking, just like an in-house NDA template, in-house legal will still need to decide if oneNDA is appropriate for a transaction. If the legal teams for the parties to a transaction still need to assess if oneNDA is appropriate, then I don’t see how the time saving is as radical as they suggest.
  • Another implication is that a salesperson couldn’t just run with oneNDA and take comfort that their company is covered for risk.

Plus, when it comes to power asymmetries, a term-taker—someone with a little negotiation power—would still have to accept the terms from a term dictator—someone with much negotiation power—even if there’s meaningful risk for the term-taker. So, how will they save negotiation time that doesn’t exist?

Reason #2: What’s IP got to do with it, got to do with it?

Under the definition of confidential information, the clause reads:

‘Confidential Information does not include information that is:

(i) in the public domain not by breach of this Agreement,’.

It appears that the drafters borrowed the phrase ‘in the public domain’ from intellectual property law. Under IP law, this term refers to IP like copyrights, patents, or trademarks that no longer enjoy exclusivity rights. In other words, the IP owners lose legal protection for the IP and it moves into ‘the public domain’ where other people or organisations can use it.

But why is this phrase in an NDA?

Lawyers often mistakenly include this phrase in NDAs. However, a good contract specialist would tell you that it’s better to use plain language.

What’s the problem with their choice?

There’s a risk that the clause won’t cover non-IP related information that becomes public without breaching the NDA. A good example is business activities. For example, Kevin tells the world that Kevin is going to be doing business with Nathan. If Nathan tells someone else that Nathan is going to be doing business with Kevin, Nathan can’t be said to have breached the NDA, because Kevin already made that information publicly available.

Instead, they should have used the phrase ‘publically available but not in breach this agreement’. This wording will cover all information that becomes public where the act of making it public was not a breach of the NDA.

Reason #3: Not enough variables

There should be more variables.

One oversight is that the NDA doesn’t cater for a delegation of authority framework where multiple signatories need to sign the NDA for the organisation to regard it as valid and enforceable.

Another oversight is that the NDA doesn’t deal with alternative dispute resolution robustly. It doesn’t:

  • set out the rules that the parties will follow,
  • the forum, and
  • encourage good-faith negotiation as the first step if a dispute happens.

End thought

oneNDA is a good start. But stick with your own NDAs until a better version comes up.

Actions you can take

  • Learn more about the different types of NDAs by reading our NDA page.
  • Manage your NDAs better by joining our contract management programme.
  • Make your NDAs more accessible by asking our legal designers to draft a bespoke NDA for your organisation.
  • Empower your team to negotiate NDAs by asking us to draft you an NDA playbook.