Tech entrepreneurs will be faced with many legal issues and questions when setting up their business. Yes, it can be long and tiring getting them all worked out but that’s just business isn’t it? If it was easy everyone would be doing it.
But while many of these legal issues will be compulsory things you’ll need to actually do and work out before you can legally set-up your business there are other more optional legal areas. Non-disclosure agreements or NDAs as they are commonly known are one of these areas.
If you don’t already know let me explain exactly when a non-disclosure agreement is, to be brief it’s a legal agreement that outlines any confidential material or information that is not to be shared with anyone else but the people who sign the agreement.
By signing the non-disclosure agreement, the other party agrees to not share or divulge any information that is outlined in the agreement. They are sometimes referred to by other names like a secrecy agreement (SA) or a confidential disclosure agreement (CDA) but whatever name they go by the rules are the same.
A non-disclosure agreement is usually always going to be between two separate parties this can be individuals, businesses or one of each. While it’s uncommon a non-disclosure agreement can be between more than two people, however in many entrepreneurs cases, it will likely be between two people.
Non-disclosure agreements can also be part of employment contracts and in the technology industry, this is usually very common. So, now you know what non-disclosure agreements are and how they work you have to ask yourself whether they are worth pursuing?
Do I Need An NDA?
Non-disclosure agreements aren’t used in every industry, but they are more common in certain fields, in the tech industry non-disclosure agreements of one form or another are relatively commonplace. When you consider how secretive much of the work in technology is a non-disclosure agreement just makes sense doesn’t it?
According to Joney Whyte who are also experienced family lawyers in Glasgow whether you’re working on a new product or are working on a new way of using existing technology the need for secrecy in the technology industry is very important. So, getting your employees or partners to sign a non-disclosure agreement is going to be very useful.
In fact, many business professionals do recommend using non-disclosure agreements even if you are not currently working on new technology or products. However, you could also utilise non-disclosure agreements on a need to know basis.
This means you will only use them when you actually think you will need them, for example when selecting a team to work on a new product you could then ask your employees to sign a non-disclosure agreement. But do entrepreneurs need to even bother with a non-disclosure agreement today?
Well opinion is split a quick Google search will bring up plenty of opinions, some people will claim they are invaluable certainly in industries like technology. While others will say they are mostly useless and unnecessary.
The main benefit of a non-disclosure agreement is that it is a legally binding document, however, that doesn’t mean that you will be protected from every eventually. Even if you get all your employees to sign a non-disclosure agreement it doesn’t mean they still can’t break the contract.
However, that is something all entrepreneurs likely know already and are prepared to deal with no legal document is an absolute deterrent, is it? The problem with non-disclosure agreements is that even when someone does break them, proving that they have can be difficult.
The difficulty of actually proving someone has breached a non-disclosure agreement is one of the reasons some business professionals don’t see them as worth their time to write up. Plus, if you work with freelancers or consultants then even getting some people to sign one can be difficult.
This can be for a wide range of reasons from job complications to the fact that some people will just not like signing them. Some people (perhaps understandably) will see a non-disclosure agreement as a sign that you think they aren’t trustworthy and therefore won’t sign them on principle.
So, the question remains, doesn’t it? Do you need non-disclosure agreements today? Only you can really answer that, it can’t be denied that when you work in an industry like technology that a non-disclosure agreement can seem to offer some great benefits. But they are not infallible by any means and you shouldn’t expect everyone to be happy with signing one.
But as an entrepreneur with their own still developing start-up taking these extra security steps will usually still be worth it. But if you are going to use a non-disclosure agreement you have to make sure it is written carefully. Non-disclosure agreements and complicated documents so take your time crafting one.
Designing The Perfect NDA
If you do decide to use non-disclosure agreements, then you need to ensure you have the time to write a high-quality one. Many entrepreneurs fall back on using templates when it comes to writing a non-disclosure agreement but for complicated matters (which you will see often in the tech field) these templates will not be up to the job.
You need to be very careful when writing a non-disclosure agreement, you need to ensure the scope isn’t too broad while also ensuring that everything that needs to be covered is still detailed in the agreement.
You also need to take other matters into account like compelled disclosures and ensure that no confidential information is disclosed prior to the signing. Writing a non-disclosure agreement isn’t as simple as you might think you can’t just list some basic details about what things the other party can’t talk about.
You also need to ensure that anyone who does sign your non-disclosure agreement fully understands what they are agreeing to. If you take the time to handle the drafting of your non-disclosure agreement, then you will likely be able to avoid making any mistakes. This will be able to help ensure your non-disclosure agreement is fit for purpose.