🔎 Sample report — this is an unedited, real output from TrustLens AI on a non-personal document, shown to demonstrate report quality.
_Mutual_NDA.pdf
Non-Disclosure Agreement · ABC Technology Solutions, LLC ↔ XYZ Consulting Group, Inc. · 2 pages
Biggest money exposure
No dollar cap on damages — if you accidentally share or misuse the other side's confidential information, you could be sued for any amount a court decides, with no limit stated in this document.
Score based on: 1 high-risk finding (+15 each), 2 medium-risk findings. Lower is better.
What this is
This is a mutual Non-Disclosure Agreement (NDA) between ABC Technology Solutions, LLC (Houston, TX) and XYZ Consulting Group, Inc. (Dallas, TX), effective July 31, 2026. It sets rules for sharing sensitive business information while both sides explore a possible software and AI business relationship. Both parties are bound equally.
Who it favors: This agreement leans slightly toward whoever shares information first (the Disclosing Party). That side can sue for unlimited damages, injunctions, and any other legal remedy if the other side mishandles their data. There is no cap on what a breach could cost you.
Where you could lose money
• No dollar cap on damages — if you accidentally share or misuse the other side's confidential information, you could be sued for any amount a court decides, with no limit stated in this document.
• Court costs and legal fees from an injunction lawsuit are possible even for a minor or unintentional breach, since the other side can seek all available legal remedies.
• Trade secret obligations last indefinitely (beyond the 5-year general term), meaning financial exposure for misuse of trade secrets has no end date.
• Using an AI tool that is considered a 'public AI system' without written permission could trigger a breach claim and uncapped liability, but the document does not clearly define which tools are restricted.
Your key obligations
• Keep all shared information strictly confidential and only use it to evaluate this potential business relationship — nothing else.
• Only share confidential information with 'authorized personnel,' but the document does not define who that includes, so you need to decide carefully.
• Do not upload any confidential information into public AI tools (like chatbots) without written approval from the other side first.
• Return or destroy all confidential information when asked — but no deadline is given for how quickly you must do this.
• Protect all shared information with encryption, access controls, and secure storage for at least 5 years (and indefinitely for trade secrets).
Deadlines & dates
• Effective Date: July 31, 2026 — obligations begin on this date.
• General confidentiality term: 5 years from the effective date.
• Trade secret protection: indefinite — no end date.
• Termination notice: either side can end the agreement with 30 days' written notice, but confidentiality duties survive termination.
• Return or destruction of information: no specific deadline is stated — the document only says it must happen 'upon request.'
Suggested next steps
• Ask a lawyer whether the lack of a damages cap creates acceptable risk for your situation, and whether a mutual liability limit should be added before you sign.
• Ask a lawyer or IT professional to clarify which specific AI tools would be considered 'public AI systems' under this agreement, so your team knows exactly what is and is not allowed.
• Review with a professional whether 'authorized personnel' should be defined more clearly — for example, by job title or department — to avoid disputes later.
• Ask a lawyer whether Texas law and courts are acceptable for resolving disputes, especially if your business is based elsewhere or operates in multiple states.
• Confirm with a professional whether the indefinite trade secret obligation is manageable for your business, and whether you need a process to track what qualifies as a trade secret.
“The Disclosing Party may seek injunctive relief, equitable relief, damages, and other legal remedies.”
If someone breaks the secrecy rules, the other side can go to court to stop the bad behavior immediately and also sue for money damages. There is no cap mentioned on how much they could claim.
Why it matters: There is no limit stated on the damages that could be claimed, which means a breach could result in very large financial consequences.
The absence of any cap on damages creates uncapped financial liability for a breach, which could be extremely costly.
Questions to ask:
• Is there any limit or cap on the amount of damages that can be claimed for a breach?
• Would a lawyer recommend adding a liability cap to protect both sides?
“Information is provided 'AS IS' without warranties.”
Neither side promises that the information they share is accurate, complete, or useful. You get it as-is, with no guarantees.
Why it matters: This means if you make a business decision based on shared information and it turns out to be wrong or incomplete, you likely cannot hold the other party responsible.
Relying on unverified information for major business decisions without any warranty could expose a party to significant risk.
Questions to ask:
• Are there any circumstances where the sharing party would be responsible if the information turns out to be inaccurate?
“The Receiving Party shall not upload Confidential Information into public AI systems that may retain or train on such information without prior written consent. Where AI-assisted analysis is permitted, reasonable safeguards must be used.”
You cannot put the other side's private information into public AI tools — like free chatbots — that might save or learn from it, unless you get written permission first. If you are allowed to use AI tools, you must still use proper security measures.
Why it matters: This is a modern and increasingly important clause. Uploading confidential data into public AI tools is a real and growing risk that many agreements do not yet address.
The term 'public AI systems' is not precisely defined, which could create confusion about which tools are restricted.
Questions to ask:
• What specific AI tools or platforms are considered 'public AI systems' under this agreement?
• Are internal or enterprise AI tools that do not train on user data permitted without consent?
“Each Party agrees to keep Confidential Information confidential, use it only for evaluating the proposed relationship, limit disclosure to authorized personnel, protect it with reasonable safeguards, and not reverse engineer proprietary technology.”
Both sides must keep each other's private information secret, only use it to decide if they want to work together, share it only with the right people inside their company, and never try to copy or decode the other side's technology.
Why it matters: This is the heart of the agreement. It sets the rules for how each party must handle sensitive information shared during discussions.
The term 'authorized personnel' is not defined, which could create ambiguity about who is permitted to access the information.
Questions to ask:
• Who exactly counts as 'authorized personnel' — does that include contractors or outside advisors?
“Includes business plans, financial information, customer lists, source code, software architecture, AI models, technical documentation, pricing, contracts, research, and trade secrets.”
A wide range of information is considered confidential — basically anything important about how either company runs, its technology, its customers, or its finances.
Why it matters: A broad definition protects both parties well, but it also means almost anything shared could trigger confidentiality obligations, so both sides should be careful about what they share.
The broad, non-exhaustive list could make it unclear whether certain shared information is covered, potentially leading to disputes.
Questions to ask:
• Is this list meant to be exhaustive, or can other types of information also be considered confidential?
“Confidentiality obligations remain in effect for five (5) years. Trade secrets remain protected as long as applicable law provides.”
The secrecy rules last for five years for most information. But for trade secrets — like special formulas or software — the protection lasts as long as the law allows, which could be forever.
Why it matters: Five years is a common and reasonable timeframe, but the unlimited protection for trade secrets means some obligations could last indefinitely.
Indefinite protection for trade secrets may create long-term obligations that are difficult to manage or track.
Questions to ask:
• How will we know which information qualifies as a 'trade secret' versus regular confidential information?
“Upon request, the Receiving Party will return or securely destroy Confidential Information unless retention is legally required.”
If asked, the party that received private information must give it back or safely delete it. The only exception is if a law requires them to keep it.
Why it matters: This gives the sharing party control over their information after discussions end, reducing the risk of misuse.
There is no stated timeline for completing the return or destruction, which could delay compliance.
Questions to ask:
• How quickly must the return or destruction be completed after a request is made?
“Use commercially reasonable safeguards including encryption, access controls, password protection, and secure storage.”
Both sides must use standard security practices — like encryption and passwords — to protect the other side's private information from being accessed by the wrong people.
Why it matters: This sets a baseline security standard, but 'commercially reasonable' is a flexible term that may mean different things to different companies.
'Commercially reasonable' is subjective and may not be sufficient if one party has much higher security standards than the other.
Questions to ask:
• Is there a more specific security standard — such as a recognized framework — that both parties should agree to follow?
“No unauthorized copying, selling, publishing, or competitive use.”
You cannot copy, sell, publish, or use the other side's private information to compete against them without permission.
Why it matters: This prevents a party from using confidential information to gain a business advantage over the party that shared it.
'Competitive use' is not precisely defined, which could lead to disagreements about what activities are restricted.
Questions to ask:
• How broadly is 'competitive use' defined — does it apply to any overlapping business activity or only direct competition?
“By certified mail, overnight courier, or email with confirmation.”
Any official notices between the two parties must be sent by certified mail, overnight delivery service, or email with a read or delivery confirmation.
Why it matters: This ensures there is a clear, trackable record of important communications, which matters if a dispute arises later.
The agreement does not specify contact names, addresses, or email addresses for notices, which could cause delays or disputes about proper delivery.
Questions to ask:
• Should specific contact names and addresses be added to make sure notices reach the right people?
“Either Party may terminate with 30 days' written notice; confidentiality survives termination.”
Either side can end this agreement by giving 30 days' written notice. Even after the agreement ends, both sides still have to keep each other's information secret.
Why it matters: The survival of confidentiality after termination is important — it means your obligations don't disappear just because the agreement is over.
Questions to ask:
• Does the 30-day notice period start from the date the notice is sent or the date it is received?
“All Confidential Information remains the property of the Disclosing Party.”
Whatever private information one side shares stays owned by that side. Sharing it doesn't give the other side any ownership rights over it.
Why it matters: This protects both parties from accidentally giving away ownership of their ideas or data just by sharing them during discussions.
Questions to ask:
• If one party creates something new using insights gained from the other party's confidential information, who owns that new creation?
“Governing Law State of Texas.”
If there is ever a legal dispute about this agreement, Texas law will be used to resolve it.
Why it matters: Both parties are based in Texas, so this is a logical and balanced choice. It means any lawsuit would likely be filed in Texas courts.
Questions to ask:
• Does this agreement specify which county or court in Texas would handle disputes, or just the state?
“This Agreement does not require either Party to enter into a business relationship.”
Signing this agreement does not mean either side has to actually do business together. It only covers the sharing of information during early discussions.
Why it matters: This protects both parties from being legally forced into a deal just because they shared information and signed this agreement.
“If one provision is unenforceable, the remainder remains effective.”
If a court decides one part of this agreement is not valid or cannot be enforced, the rest of the agreement still stands and remains in effect.
Why it matters: This is a standard protective clause that keeps the whole agreement from falling apart if one section has a legal problem.
“Electronic signatures are valid and enforceable.”
Both sides agree that signing this agreement digitally — such as through an e-signature tool — is just as legally valid as signing on paper.
Why it matters: This makes it easier and faster to finalize the agreement without needing to print and mail physical copies.
This analysis is decision support, not legal advice. Consult a licensed attorney before signing or relying on this document.