Most people sign NDAs without reading them because they look standard. The problem is that 'standard' NDA language varies enormously — from reasonable mutual confidentiality agreements to one-sided documents that heavily favor the other party. Scrutr tells you which you have.
What AI NDA review checks automatically
Scrutr's AI NDA review checks: whether the NDA is mutual or one-sided, the definition of confidential information (narrow vs. overbroad), the presence of standard carve-outs (public domain, prior knowledge, independent development, compelled disclosure), the residuals clause if any, duration and expiration of obligations, governing law, whether non-compete language is buried in the NDA, and whether the remedies clause (injunctive relief, liquidated damages) is mutual or one-sided.
Mutual vs. one-sided NDAs — what's the difference?
A mutual NDA creates confidentiality obligations for both parties — each protects the other's confidential information. A one-sided NDA creates obligations only for one party, typically the recipient of information. One-sided NDAs are appropriate in some contexts (e.g., a job interview where only the employer is sharing sensitive information). The issue is when a one-sided NDA is presented as 'standard' in a context where mutual obligations would be fair — like a business partnership discussion where both sides are sharing sensitive information.
The residuals clause — a commonly missed provision
A residuals clause allows a party to use information retained in human memory — even if technically confidential — without restriction. Tech companies sometimes include favorable residuals clauses for themselves while not extending the same right to you. A residuals clause that applies to one party but not the other creates an asymmetry worth flagging. Scrutr identifies residuals clauses and whether they're mutual.
Missing carve-outs that should be in every NDA
Standard NDA carve-outs exclude four categories of information: information already in the public domain, information you already knew before signing, information you received from a third party without restriction, and information you develop independently without using the confidential information. An NDA missing these carve-outs creates liability for information you legitimately came by through other means. Scrutr checks for all four and flags their absence.
Duration — how long should NDA obligations last?
Most commercial NDAs have a defined term of 1–3 years. NDAs involving genuine trade secrets may include indefinite protection for the trade secret information specifically. The red flags: no stated expiration date, obligations that survive indefinitely for all information categories, or a duration that extends years beyond the business relationship the NDA was created to protect.