Is it ridiculous of me to ask for changes to a companies standard NDA agreement?

In my experience, it is hopeless to seek changes to a NDA, and it will give bad vibes in the business relationship if you try. The reason is that your counterpart in the other company is typically powerless to change the NDA -- it is mandated by 'company policy', and your counterpart will not like to be reminded that he is powerless.

I tend to look at whether the NDA is mutual, by which I mean whether it places the same burdens on the NDA's creator as it does on me. If it's mutual then I generally sign them, considering it a (sad) necessary evil of doing business.

If you're strictly a supplier who sells a standard product to other companies, then you won't see many NDAs. But if your business relationship is closer, then my experience is that the majority of larger US companies will present you with a NDA at some point. Thus a policy of not signing NDAs or seeking to change them may be unrealistic, depending on which area of business you are in.

Jason's answer is very good, but let me just add one thing. I work for a very large corporation in the Fortune 500, and we sign NDAs with other companies all the time. Either we sign theirs or they sign ours. We have a "standard NDA" that is company policy, however, it is not at all unusual to have to go through a series of revisions. We don't get "bad vibes" if someone asks for a change, because its important that each side be comfortable with the exchange. Changes to the NDA will extend the process, and there is a chance that your changes will not be acceptable. However, I suggest you ask for the changes you want. If they say no, then you can consider how to proceed. If you don't ask, you don't know.

There are usually 2 parts to an NDA. The description of the information to be shared which includes the what it can be used for and then the boilerplate. In general I agree with Jesper that most people are unable to change the boiler plate (and like Jason says if you get sued venue is the least of your worries) but you can often easily change the non-boiler plate part. One common thing to do is to narrow the NDA to only cover certain types of information. In general when I review NDA's I:

• Check to make sure that it's bi-directional
• Check that the information it's covering is correct (type and content)
• Check the duration to make sure it's reasonable
• Make sure confidential information has to be marked (sometimes there are clauses that say anything that anything can be confidential without having to state it is)

At the same time, don't ever let the NDA get in the way of business. As Jesper says often there is very little the person you are working with can do to change the NDA but I've always found that reasonable changes to the clauses above are often successful.

I guess it would be helpful to understand the size of the company you are dealing with. Most small companies have not written their own NDA's but pulled a boilerplate document from another source or the web, which creates a situation of lack of understanding of what the document does.

Jason raises a good point and the clause he is addressing is most likely titled "Remedies", below is an example of that language and something you definitely want to modify, at the very least replace with "specific performance".

• "In the event of a breach of this Agreement by one party, the other party shall be entitled to payment of all costs and expenses, including reasonable legal fees, incurred in connection with its enforcement of this Agreement."

The other clause you need to watch is titled "Term", most NDA's will push for a 5 year term, does that make sense for your business? Make sure you check it and understand the ramifications.

ALWAYS change to YOUR advantage - NDA's are drafted by companies/entities to their ADVANTAGE

I agree with everything stated in Jason's post. Just a couple of things to add.

From my experience, if you're dealing with a large corporation, it isn't worth the effort to negotiate changes to a standard NDA. As Jesper mentioned, your best bet is to make sure you are signing a mutual NDA; these are more likely to be fair to both parties.

If you are dealing with a small private company, it is possible to negotiate terms. I generally wouldn't bother to do this for boilerplate terms like jurisdiction or arbitration. I would focus on scope definition, term length, indemnification (NEVER accept open-ended unless this is a bet the company deal because that's what you would be doing), and any other unusual restrictions. The good news is scope definition is the most customary customizable piece of an NDA.

I'll address your first question.

As a small company doing business with several larger companies who are competitors, I think you run the risk of having the NDA'd vendor exert a heavy hand on your business. Before you sign the NDA, ask yourself:

Do they view you as a strategic advantage vs. their competitors? (If so, they might try to strong-arm you if you generating too much success for a competitor)

Are you prepared to implement a fire-wall between your teams so that proprietary info does not wind up in the heads of teams working on competitor projects?

Can they convey the information to you (or most of the information) without going under NDA?

Is there an additional monetary commitment that can be extracted from the vendor because of the NDA execution?

Is there some reason to expect that the other competitive vendors will not also ask to sign NDAs, and will this create additional issues.

Personally, I would be biased against signing the NDA unless you feel that you could get significantly more business from this vendor at the expense of working with their competitors.