Severity Rubric

Every issue identified in the review gets one of three severity ratings: Critical, Material, or Minor. The rating drives where the issue appears in the report and how strongly the recommended next steps treat it.

The rubric is calibrated for in-house counsel making business-pragmatic judgments, not for purist drafting standards. An issue is critical because it would change the user's recommendation, not because it is technically imperfect.

Critical

An issue is critical if any of these are true:

1. Operationally impossible. Compliance with the provision would be impossible or would require fundamental changes to how the user's organization operates. Example: mandatory destruction with no backup-retention exception, in an organization with standard backup infrastructure.

2. Significant unbargained-for restraint. The provision creates a substantive restraint on the user's business beyond the confidentiality purpose. Examples: non-competition clauses outside an M&A context, broad IP assignments, harsh indemnification.

3. Eliminates standard protections. From the discloser perspective: residuals coupled with broad permitted use; trade-secret-information exclusions that swallow protection; missing equitable relief language. From the recipient perspective: missing standard exclusions (public domain, prior knowledge, independent development); permitted disclosures that block legal counsel; perpetual obligations on broad categories of information.

4. Magnitude of asymmetry in a "mutual" NDA is severe. A mutual NDA where one side's information is substantially better protected than the other's, where the asymmetry is structural rather than incidental.

5. Document type mismatch. The document presented as an NDA is doing something fundamentally different (e.g., is actually a diligence agreement, a teaming agreement, or a license).

A critical issue, in the recommended next steps, typically warrants: do not sign as-is; negotiate or escalate.

Material

An issue is material if any of these are true:

1. Notable departure from standard. The provision deviates from market-standard NDA practice in a way that creates real but not catastrophic exposure. Examples: 5-year general confidentiality term (longer than standard but not extreme); permitted-disclosure clause requiring counterparty consent for advisor disclosure (unusual but not blocking).

2. Operational friction without operational impossibility. Compliance is possible but creates burden the user should weigh. Examples: certificate-of-destruction requirement on a tight timeline; audit rights in a non-regulated context.

3. Unusual provisions warranting business judgment. Provisions that are not inherently problematic but are unusual enough to warrant the user's deliberate decision. Examples: non-solicitation in a non-M&A NDA; publicity restrictions extending beyond the deal term; liquidated damages.

4. Asymmetry of moderate magnitude. Asymmetric provisions in a mutual NDA where the asymmetry is real but not severe.

5. Conflicts with disclosed prior agreements. Provisions that conflict with the user's prior agreements, where the conflict is identifiable but resolvable.

A material issue, in the recommended next steps, typically warrants: negotiate the redline or accept with explicit awareness of the trade-off.

Minor

An issue is minor if it is true that:

1. Drafting cleanliness only. The provision is acceptable substantively but could be drafted more clearly. Examples: ambiguous notice provisions; missing counterparts clause; minor inconsistencies between clauses.

2. Departure from preference rather than from standard. The provision is within the normal range but not the user's first preference. Examples: 3-year term where user prefers 2; New York governing law where user prefers Delaware; advisor disclosure requiring confidentiality obligation rather than fiduciary obligation.

3. Standard provision present in an unusual location or with unusual phrasing. Substantively fine but worth noting for the user's awareness.

A minor issue, in the recommended next steps, typically warrants: no action required, or accept with awareness.

How to apply the rubric

When in doubt between two ratings, apply this principle: rate down to the higher-effort category if the user's reasonable response would be different. If a "minor" rating would suggest acceptance and a "material" rating would suggest negotiation, and you genuinely think negotiation is the right call, rate material.

Conversely, rate up to the lower-effort category if escalation is unwarranted. Critical ratings drive escalation pressure; do not call something critical because it is technically wrong if a competent business judgment could accept it.

Calibration check: a typical commercial NDA, reviewed in good faith, will surface 0–2 critical issues, 1–4 material issues, and several minor issues. If your review surfaces no critical issues, that is correct for clean documents — do not invent severity to fill the section. If your review surfaces many critical issues, that is correct for problematic documents — do not soften severity to make the report comfortable.

Severity is not certainty

A critical rating is a call to action, not a guarantee. The skill is making a probabilistic judgment based on patterns observed across many NDAs. Two implications:

1. Cite specifically. Every severity rating should be tied to a specific clause reference so the user can verify the call.
2. Defer to user expertise on judgment calls. When severity depends on facts the skill does not have (the user's appetite for non-solicits, the specific regulatory context, the user's history with this counterparty), say so. Surface the issue, propose a severity, and note what facts could change the rating.

The user is the decision-maker. The rubric exists to help them prioritize, not to make decisions for them.