- Ontario law does not set a mandatory or default length for how long confidentiality obligations must last.
- A common source of confusion is treating the NDA's own term as the same thing as how long confidentiality lasts.
- - A fixed number of years after disclosure or after termination.
Businesses drafting a non-disclosure agreement often default to one of two extremes: a short, generic term copied from an old template, or a sweeping "confidentiality obligations survive forever" clause meant to look protective. Neither approach usually reflects what the business actually needs.
Choosing the right confidentiality period is less about finding a magic number and more about matching the term to how long the information will realistically stay valuable — and to what kind of information it actually is.
There's No Fixed Legal Term for an NDA
Ontario law does not set a mandatory or default length for how long confidentiality obligations must last. The term is a matter of contract — whatever the parties negotiate and put in writing. That flexibility is useful, but it also means a poorly chosen term, whether too short to matter or too long to be reasonable, is entirely the drafters' doing.
Two Different Clocks: Relationship Term vs. Survival Period
A common source of confusion is treating the NDA's own term as the same thing as how long confidentiality lasts. In most well-drafted agreements, these are two separate clocks:
- The agreement's term — how long the NDA itself is in effect, sometimes tied to an underlying business relationship (a services agreement, a partnership discussion, an evaluation period).
- The confidentiality survival period — how long the obligation to keep information confidential continues after the agreement or relationship ends. This is usually the number that actually matters, since most disputes arise after a relationship winds down, not while it's active.
A clause that lets confidentiality obligations expire the moment the underlying relationship ends often defeats the purpose of the NDA entirely.
Common Approaches to Setting a Term
- A fixed number of years after disclosure or after termination. This is the most common approach for ordinary business information — financial details, business plans, customer information — where the sensitivity of the information fades over time.
- An indefinite or perpetual term for genuine trade secrets. Real trade secrets, such as a formula, a process, or source code, can warrant protection with no fixed end date, because their value depends on the information staying secret indefinitely — but the underlying secrecy still has to be real and actively maintained for that protection to mean anything in practice.
- A tiered structure. Many well-drafted NDAs apply a fixed term to general confidential information while separately carving out trade secrets, or specifically identified highly sensitive categories, for longer or indefinite protection.
Why "Forever" Clauses Can Backfire
A blanket clause declaring that all disclosed information stays confidential forever, regardless of type, sounds protective but can create real problems:
- It can be seen as broader than necessary to protect any legitimate interest, which makes the whole clause more vulnerable to challenge rather than less.
- It makes it harder, years later, to sort out what is genuinely still sensitive from information that has long since become stale, public, or irrelevant.
- Sophisticated counterparties often refuse to sign an uncapped perpetual clause, or negotiate it down anyway — so an overreaching first draft can simply cost time in negotiation without ever actually being enforced as written.
- It can complicate a receiving party's own recordkeeping and independent-development defences indefinitely, which cuts against everyone's interest in a workable, evidence-based relationship.
A precisely scoped term — long where the information genuinely warrants it, ordinary where it doesn't — tends to hold up better than a maximalist one.
Factors to Weigh When Choosing a Term
- [ ] How quickly does this type of information typically go stale or become public on its own?
- [ ] Is any of the disclosed information a genuine trade secret, as opposed to ordinary business information?
- [ ] How long will the underlying business relationship or evaluation realistically take?
- [ ] Will the counterparty push back on an unusually long or perpetual term, and is that pushback worth negotiating through?
- [ ] Does the clause distinguish between the agreement's term and the confidentiality survival period?
Frequently asked questions
Is there a standard or default NDA term used in Ontario?
No single default exists — it is entirely a matter of what the parties negotiate. Terms vary widely depending on the industry, the sensitivity of the information, and whether any of it qualifies as a genuine trade secret.
Should the confidentiality period run from the date of signing or from the date each piece of information is actually disclosed?
Running the clock from each disclosure is generally more precise, especially in longer relationships where information is shared over time rather than all at once. A single clock starting at signing can be simpler to administer but may under- or over-protect information depending on when it was actually shared.
Can a perpetual confidentiality clause actually be enforced?
It depends on what it covers. A perpetual term applied narrowly to genuine trade secrets is more defensible than one applied broadly to every piece of information exchanged, sensitive or not. Overly broad perpetual clauses are more likely to be challenged or narrowed.
What happens to confidentiality obligations if the underlying contract ends early or is terminated for breach?
This should be addressed directly in the NDA through a "survival" clause specifying that confidentiality obligations continue for a defined period, or indefinitely for trade secrets, regardless of why or when the underlying relationship ends. Without one, it can be unclear whether confidentiality obligations end along with everything else.
This is a corporate question
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