NDA Template In California: Uses And Limits (2026)

What Is a Non-Disclosure Agreement in California?

What is an NDA under California law? A California non-disclosure agreement is a contract that prevents or restricts the disclosure of factual information. The term “factual” is important because California also recognizes non-disparagement agreements that prevent the dissemination of opinions.

Types of NDAs Used in California

NDAs are either unilateral or mutual, based on the number of parties subject to the disclosure restrictions. The difference between a mutual vs. unilateral NDA is that a mutual NDA binds multiple people to keep information confidential, while a unilateral NDA only binds a single party.

Essential Clauses to Include in a California NDA

All written and oral contracts in California require mutual assent, consideration and reasonably clear terms. Mutual assent means that the parties voluntarily agreed to the contract. You establish mutual assent by listing the parties and having them sign the agreement.

Consideration refers to the promises exchanged. In a mutual NDA, the parties usually promise to preserve the confidentiality of each other’s information. In a unilateral NDA, one party promises to keep the information confidential in exchange for something else, such as money.

The terms must be clear enough that the parties understand what they can or cannot do. An NDA should describe the protected information and how it may be used or not used.

California Laws That Affect NDA Enforceability

In 2021, California passed an NDA law with two restrictions. First, it prohibited settlement agreements with NDAs in any of these types of lawsuits:

• Sexual assault
• Sexual harassment
• Workplace harassment, discrimination or retaliation
• Housing discrimination, harassment or retaliation

Second, it prohibited employment contracts that blocked the disclosure of any illegal workplace acts that the employee might observe while working. These provisions work together to restrict employers from prohibiting disclosures before or after an illegal act occurs.

How to Write and Customize Your California NDA

You can start with an NDA template in California and add your custom terms. However, keep in mind that every state, including California, has unique contract laws. Thus, you should consider consulting a local lawyer for assistance.

Some elements that most NDAs should cover include:

• Identification of the parties
• Duration of the agreement
• Scope and obligations
• Remedies for a breach

Make sure to be specific, as vague terms can render any contract invalid.

Draft Your NDA With Help From ConsumerShield

At ConsumerShield, we help people solve their legal problems and ensure they understand their rights. Explore our collection of resources and tools today.