AI NDA authoring software can turn a blank page into a solid first draft in minutes. It cannot decide what you are trying to protect, or whether the result is right for your deal. That part is still yours.
This guide walks through the process in order: what to decide before you generate anything, what to give the tool, what to check in the output, and how to get it signed. It works with any decent drafting tool, and we show where Ergora fits at the end.
Step 1: Decide what kind of NDA you actually need
Most bad NDAs start with the wrong type. Settle these three questions first:
- One way or mutual? If only you are sharing sensitive information (say, briefing a freelancer), a one-way NDA protects you. If both sides will share information (a partnership or a vendor discussion), use a mutual one. A one-way NDA sent to a partner often gets pushed back, and wastes a week.
- What is the purpose? "Evaluating a possible partnership" is a good purpose. "Any business dealings" is not. A narrow purpose limits how the other side can use your information.
- How long should it last? Confidentiality terms of two to five years are common for ordinary commercial information. Trade secrets are usually treated differently and may need protection for as long as they stay secret. If that is your situation, take proper advice.
Write the answers in two or three lines. You will feed them to the tool.
Step 2: Gather the inputs the tool needs
AI drafting is only as specific as what you give it. Before you start, collect:
- The full legal names of both parties and their registered addresses (check Companies House for UK limited companies).
- A plain description of the confidential information: product roadmaps, pricing, customer lists, source code, supplier terms.
- The purpose, term and governing law. For UK and EU businesses, England and Wales (or the relevant EU member state) is the usual choice.
- Any carve-outs you already know you need, such as information the other side already holds.
The most common mistake is describing the information too vaguely, then discovering the NDA does not clearly cover the thing you cared about.
Step 3: Generate the draft, then read it like the other side would
Generate the first draft, then read it once as the party receiving it. Ask whether you could live with every obligation. Our NDA review checklist covers the 12 clauses worth checking in detail. The short version:
- Definition of confidential information. Broad enough to cover what matters, with sensible exclusions (public information, independently developed, already known).
- Permitted use. Limited to the stated purpose.
- Permitted disclosure. Who on the other side can see it: employees and advisers who need to know, and who are bound by equivalent duties.
- Term and survival. How long the obligations last, and what survives termination.
- Return or destruction. What happens to the material when the relationship ends.
- Remedies and governing law. Where a dispute would be heard.
AI tools can produce wording that sounds authoritative but quietly skips one of these. A checklist beats a skim.
Step 4: Use a clause library so you stop starting from scratch
The second NDA you draft should be quicker than the first. The way to get there is to keep your preferred wording in one place: your standard definition, your standard term, your preferred governing law, your fallback positions when the other side pushes back.
Whether you keep this in a document, a folder or a tool, the principle is the same. Decide your positions once, calmly, then reuse them. It also keeps you consistent, which matters when three different people in your business send NDAs.
Step 5: Review incoming NDAs against your own positions
Half of NDA work is reviewing the other side's paper. Their template will favour them. Compare it with your positions clause by clause:
- Is it mutual when it should be?
- Is the term proportionate?
- Does it restrict you in ways that go beyond confidentiality, such as non-solicitation or exclusivity buried in the NDA?
- Does it let them use your information for purposes beyond the deal?
For a closer look at which tools help here, see our roundup of the best AI NDA software for small businesses.
Step 6: Get it signed properly
A drafted NDA that sits in an inbox protects nothing. Agree the final version, then sign it with an e-signature tool that records who signed and when. Keep the signed copy somewhere findable, and diarise the expiry date. Many small businesses lose track of when their NDAs end, which matters if you need to renew or confirm that material was returned.
If you want a starting structure for a two-way agreement, our mutual NDA template for small business sets out the clauses and the signing step.
Where Ergora fits
In the Legal pack, Ergora has an NDA Generator, a Clause Library, a Legal Playbook for your preferred contract positions, a Contract Scanner, a Risk Scorer and Native E-Signatures. So drafting, comparing and signing can happen in one place.
To be precise about the limits: the Legal Playbook stores your positions, and after you scan a contract in Contract Scanner you can run Check against playbook to compare its clauses with them and get suggested counter wording. It does not check incoming contracts automatically, and it does not replace legal advice.
On cost: Ergora has seat plans from $99 a month, with specialist packs from $59 a month on top. There is no free plan or trial, but there is 50% off the first month and a 30-day money-back guarantee.
When to still call a solicitor
AI drafting is fine for routine, low-stakes NDAs. Get a human lawyer involved when:
- The information is a genuine trade secret or core intellectual property.
- The deal is large, or the other side is much bigger than you.
- Parties are in several jurisdictions with different rules.
- The other side has rejected your standard terms and is asking for unusual ones.
A good pattern is to use AI for the first draft and the comparison work, then pay a solicitor for a short review on the deals that matter. That is cheaper than having them draft everything.
FAQ
Is an NDA drafted by AI legally binding?
An NDA is binding if it meets the normal requirements for a contract and is properly agreed and signed, whoever or whatever drafted it. The risk with AI drafts is not validity but gaps or poor wording, which is why you should check the key clauses.
Should I use a one-way or mutual NDA?
Use one-way when only you are disclosing information. Use mutual when both sides will share confidential material. Mutual NDAs are usually quicker to agree because neither side feels exposed.
How long should an NDA last?
Terms of two to five years are common for ordinary commercial information. Trade secrets may need longer protection, so take advice on those.
Can AI review an NDA someone else sent me?
Yes, AI can summarise an incoming NDA and flag clauses that differ from your preferred positions. Treat it as a first pass and check the flagged clauses yourself.
Do I need a solicitor for every NDA?
Not for routine ones. Use a solicitor for high-value deals, genuine trade secrets or unusual terms.