An NDA does not have one universal length. It usually has two separate time periods: the NDA term, which controls when the parties may share confidential information, and the term of confidentiality, which controls how long the receiving party must protect that information.
Common Paper’s 2024 Contract Benchmark Report provides a useful reference point. Among NDAs with a fixed expiration, 74% use a one-year NDA term. The most common term of confidentiality is two years. For confidentiality obligations, 74% use a fixed period and 26% continue in perpetuity.
The short answer
A one-year NDA term and a two-year confidentiality period are common choices in Common Paper’s 2024 benchmark data. That does not make them the right terms for every agreement. The parties should consider how long they expect to exchange information and how long that information is likely to remain sensitive. Trade secrets often need different treatment from ordinary business information.
An NDA has two different clocks
| Time period | What it controls | Common Paper benchmark signal |
|---|---|---|
| NDA term | The period when the parties may share protected information under the NDA | Among NDAs with a fixed expiration, 74% use a one-year term |
| Term of confidentiality | The period when the receiving party must protect information that was disclosed | Two years is the most common fixed period |
What is the NDA term?
The NDA term is the period when the agreement is active for new disclosures. If the NDA term is one year, information shared during that year can receive the agreement’s protection. Once the term ends, the parties should not assume that new information is covered unless they renew the agreement or sign another one.
The Common Paper Mutual NDA lets the parties choose a fixed term or a term that continues until one party terminates it. Among NDAs with a fixed expiration in Common Paper’s 2024 benchmark, 74% use a one-year term, 15% use two years, and 5% use three years.
What is the term of confidentiality?
The term of confidentiality is how long the receiving party must protect confidential information. It can continue after the NDA term ends. This is why an NDA may stop accepting new disclosures after one year while information already shared remains protected.
Common Paper’s benchmark shows that 74% of NDAs use a fixed confidentiality period and 26% use confidentiality obligations that continue in perpetuity. The most common fixed confidentiality period is two years.
When does the confidentiality period start?
The start date changes the practical length of protection. The Common Paper Mutual NDA lets the parties measure the term of confidentiality from either the Effective Date or the date of the last disclosure.
From the Effective Date
A period measured from the Effective Date gives the parties one fixed start date. It is easier to track, but information disclosed near the end of the NDA term may receive protection for a shorter period of time than information disclosed at the beginning.
From the date of last disclosure
A period measured from the date of last disclosure gives later disclosures a full protection period. It can require more recordkeeping because the parties need to know when the last protected disclosure occurred.
Should confidentiality last forever?
Some agreements protect all confidential information in perpetuity. Others use a fixed period for ordinary confidential information and preserve protection for trade secrets for as long as the information qualifies as a trade secret under applicable law.
The default fixed-period option in the Common Paper Mutual NDA follows the second approach. It applies the selected confidentiality period to confidential information and continues protection for trade secrets until the information is no longer considered a trade secret under applicable law.
How to choose an NDA term
Choose a term that covers the period when the parties expect to exchange information. Consider:
- How long the evaluation, sales process, partnership discussion, or project is expected to last
- Whether disclosures will happen once or continue throughout the relationship
- Whether the parties want the NDA to expire on a fixed date or continue until terminated
- Whether another commercial agreement will later replace the NDA’s confidentiality provisions
How to choose a confidentiality period
Choose a protection period based on the information itself. Consider:
- How long the information is likely to retain commercial or competitive value
- Whether the information will become public, obsolete, or replaced
- Whether the receiving party can identify and manage the information for the full period
- Whether trade secrets should receive separate treatment from other confidential information
- Whether the period runs from the Effective Date or from the last disclosure
A practical example
Suppose two companies sign an NDA with a one-year NDA term and a two-year confidentiality period measured from the Effective Date. They may share protected information during the first year. Their confidentiality obligations continue through the end of the second year, even though the NDA term for new disclosures has already ended.
If the same two-year confidentiality period were measured from the date of last disclosure, the protection period could extend later. Information shared near the end of the one-year NDA term would receive two years of protection from that later disclosure date.
Set the terms in the Common Paper Mutual NDA
The Common Paper Mutual NDA places the NDA term and term of confidentiality on its Cover Page, so both parties can see and configure the two periods separately. Generate the agreement for free, choose the terms that fit the exchange, and review the final agreement with counsel when needed.
Common Paper is not a law firm and does not provide legal advice. Common Paper forms are not customized for any particular user and are not a substitute for advice from a lawyer.