Reference document for legal counsel and compliance officers
1. Overview
The NDA Review tool reviews non-disclosure agreements by benchmarking them against QCP Capital Pte Ltd's standard mutual NDA terms. QCP is a digital assets broker-dealer incorporated in Singapore.
NDAs are routine commercial agreements with relatively low overall legal risk.
The review is pragmatic, not overly conservative. The goal is to flag genuinely problematic clauses, not to manufacture issues where none exist.
Three review modes are available: Mutual, QCP as Receiving Party, and QCP as Disclosing Party.
2. QCP Standard Mutual NDA (Benchmark)
The following key terms form the baseline for comparison against counterparty NDAs:
Structure: Mutual NDA — both parties equally bound.
Definition of Confidential Info: Broad but standard — covers business, marketing, operational, technical, financial, IP, personnel, and transaction information. Standard carve-outs for public info, prior knowledge, third-party disclosure, and independent development.
Permitted Disclosure: Only to Representatives with need-to-know. Receiving Party is responsible for Representatives' compliance.
Confidentiality Obligations: Use only for Transaction purposes; no competing use; reasonable measures to protect.
Mandatory Disclosure: Permitted if required by law, court, or regulator, with notice where legally permissible.
Breach & Remedies: Immediate notification required; injunctive relief available; monetary damages may be insufficient.
Return of Information: Return or destroy within 30 days on request. Retain only for legal, regulatory, or compliance purposes. Certification required.
No Warranty: No representation that information is complete or accurate.
Duration: 1 year from execution.
Survival: Clauses 2 (confidentiality) and 4 (breach/remedies) survive termination.
No Personal Liability: Obligations on corporate entity only.
3. Review Modes
Mutual NDA — Least Stringent
Both parties have equal obligations, making the agreement inherently fair.
Primary concern: asymmetric clauses that appear mutual but impose a greater burden on QCP.
Look for definitions scoped asymmetrically or one-party-only obligations.
Standard mutual clauses are flagged GREEN or not flagged at all.
QCP as Receiving Party — Moderate Scrutiny
QCP is receiving and protecting the counterparty's information.
Focus on ensuring QCP's obligations are reasonable and standard.
Check: Can QCP share with Representatives? Retain for compliance? Standard exceptions present? Legal disclosure carve-out?
Being one-sided is expected and not an issue in this mode.
QCP as Disclosing Party — Most Stringent
QCP is sharing its confidential information and needs strong protection.
Check: Is the definition broad enough to cover QCP's business info? Use restricted to agreed purpose? No competing use? Return/destroy obligations on counterparty? Assignment restrictions? Breach notification? Injunctive relief?
RED flag if: no return/destroy obligation, counterparty can assign without consent, no breach notification, no injunctive relief, or definition too narrow.
4. Red Flags (Escalate to Legal)
Red
1. Personal Liability Clauses
Any clause making directors, officers, or employees personally liable. QCP's standard imposes obligations on the corporate entity only. Personal liability is unacceptable.
Red
2. Liquidated Damages / Penalty Clauses
Pre-determined monetary penalties for breach (e.g. "$X per breach"). These are unusual in NDAs and potentially unenforceable under common law. Distinguished from the standard right to seek damages, which is normal.
Red
3. Non-Common-Law Governing Law
Governing law of a jurisdiction that is not common law.
Common law jurisdictions include: Singapore, England & Wales, Hong Kong, Australia, all 50 US states (including Washington, California, New York, Delaware, Texas, Florida, Illinois), Canada (except Quebec), India, Malaysia, New Zealand, Ireland, and other Commonwealth jurisdictions.
Civil law jurisdictions (RED): France, Germany, Japan, South Korea, China, mainland UAE (note: DIFC is common law), Indonesia, Thailand, Vietnam, Brazil.
Important: US state governing law = common law = flag GREEN as foreign but acceptable jurisdiction. Never flag any US state as non-common-law.
Red
4. Indemnification Clauses
Broad indemnification where the Receiving Party must indemnify for any breach, not just losses caused. Standard NDAs rely on standard contractual remedies.
Red
5. Non-Compete / Non-Solicitation
Restrictions on QCP doing business with competitors or hiring the counterparty's employees. These provisions do not belong in an NDA.
5. Yellow Flags (Note for Awareness)
Yellow
1. Unduly Long Duration
3+ years or perpetual/indefinite. QCP standard is 1 year. A 2-year term is common and acceptable.
Yellow
2. Survival Period
Confidentiality obligations surviving unusually long after termination (5+ years or perpetual).
Yellow
3. Overly Broad Definition
"Any information whatsoever" without standard carve-outs, or a definition that includes publicly available information.
Yellow
4. Restrictive Return/Destruction
Must destroy all copies with no compliance retention exception, or very short timelines (e.g. 7 days vs QCP's 30 days).
Yellow
5. Audit/Inspection Rights
Disclosing Party can audit the Receiving Party's systems or premises. Unusual for a standard NDA.
Yellow
6. Quasi-Penalty Provisions
Disproportionate "costs of enforcement" clauses, or obligation to pay the other party's legal fees regardless of outcome.
Yellow
7. Assignment
Allows assignment without consent, or restricts assignment more than standard.
Yellow
8. Unusual Jurisdiction Combination
Common law governing law but arbitration or dispute resolution in a different, less convenient forum.
6. Green Flags (Minor Observations)
Green
Minor Deviations
Slightly different wording with equivalent meaning
Different but reasonable notice periods
Additional standard carve-outs
Minor formatting or structural differences
2-year term (vs QCP's 1-year standard)
Standard "prevailing party pays costs" provisions
Additional but reasonable representations
US state governing law (common law, acceptable foreign jurisdiction)
7. Verdict Definitions
OK to Sign
No red flags, acceptable terms. Can be signed without further legal review.
Review Recommended
Yellow flags present. Legal should be aware but likely fine to sign.
Escalate to Legal
Red flags present. Must be reviewed by legal counsel before signing.
8. Important Notes
Personal liability and non-common-law governing law are the main deal-breakers.
Everything else is negotiable.
All US states are common law systems — never flag a US state as non-common-law.
NDAs are routine — do not manufacture issues where none exist.
If an NDA is substantially similar to QCP's standard, the tool will say so.