Roundtable Q&A: What is an NDA, & when should I use one?
Hey, ya’ll! For today’s topic, I wanted to discuss an issue that came up when I was talking to a couple of creatives at our last Rising Tide Society meeting. An issue had arisen recently when a client wanted them to sign an NDA or a nondisclosure agreement, and they were not sure if they should sign it or not. Now, I don’t know any specifics of their case other than that, but I do want to take the time to explain what an NDA is, and when it is appropriate to use or sign one. Here’s the answer!
An NDA is how you ensure that the party you will be working with on a project will keep your confidential information secret. Basically, the parties agree to protect ideas about a project before actually entering into a formal contract for the services. So, say you’re a graphic designer. It wouldn’t be fair (or at least not wise) for a client to hire you, but refuse to tell you anything about what they need for an upcoming project, citing that it’s a secret, right? An NDA will provide a bridge between their want for secrecy and your need for pertinent information.
If you think about it, anytime you’re usually hiring that service provider to help transform your idea into reality (i.e., a product), you don’t want to give away all of your innovative ideas upfront, right? An NDA prevents that other person from sharing that idea or swiping it for themselves.
Not every idea is protectable by US IP laws, but an NDA will ensure that your potential collaborator or hire is legally required not to share your idea, or face a financial penalty if they do. If worst comes to worst and you have to enforce the NDA, its existence alone already helps prove that the product concept was yours, to begin with. As a general rule, it is better to sign an NDA before confidential information is disclosed, rather than after.
Now, asking everyone you talk to about your projects to sign an NDA will likely just deter legitimate opportunities from finding you, so don’t overuse them. Having said this, if you’re revealing any proprietary info, which you should always be hesitant to do, an NDA will provide the protection you need. Once an obligation to keep the information confidential is gone, it’s gone forever. If any sort of proprietary information will be exchanged during the project, an NDA is appropriate.
