[NDA] Indemnification - No

You final got Big Corp to listen to your sales pitch, and now they want you to sign an NDA. No problem. You see 'indemnification' in the NDA. Is this market? including 'Indemnification' in NDAs is NOT market Indemnification is an explicit covenant to pay compensation for losses taken as a
Feb 26, 2024
[NDA] Indemnification - No

You final got Big Corp to listen to your sales pitch, and now they want you to sign an NDA. No problem. You see 'indemnification' in the NDA. Is this market?

including 'Indemnification' in NDAs is NOT market

Indemnification is an explicit covenant to pay compensation for losses taken as a result of a breach of the NDA.

Its worth noting the word 'explicit', since there is literature that suggest that absence of indemnity does not preclude the disclosing party from being able to claim damages or seek an injunction [inhouselegalsolutions.com] (consult a legal professional for more information)

So let's look at what is said and the available data on this.

Whilst not market standard, it is not uncommon to see a request for indemnification for all losses <inhouselegalsolutions>

Most up-to-date data comes from SuperLegal who says that Indemnification clauses appeared in NDAs 15% of the time.

And a bit older (2018) posts shows that roughly 20-30% of NDAs ( Unilateral and mutual) have indemnification . <LinkedIn Post>

<survey from Business Law Center on Westlaw>

So, again, there may be instances where including indemnification in your NDA would make sense, and you should consult a legal professional to determine if its right for you. But more than a majority of NDAs in the US do NOT have indemnification. Now you know.

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