If you’ve ever tried to land a contract software development job you’ve probably had to deal with the issue of a Non-Disclosure Agreement. In the software world, they are incredibly common, and unfortunately, quite painful.
I’m frequently asked to sign an NDA when talking to potential clients. Almost invariably, the NDA has a few characteristics:
- It is one sided.
- It is incredibly broad
- Its term has no limit
- It assumes that information can come from only one source
When I see these NDAs, I immediately get a little nervous. I take contracts seriously. I don’t sign any agreement I’m not willing to follow. That means I will frequently push back on these types of agreements. More often than not, I hear that I’m the first person who isn’t willing to sign their NDA. I hope this isn’t true.
If you sign one of these NDAs, you’re asking for trouble. For example, some of the agreements I see state that they cover all information discussed. That means if we discuss the weather, I’m legally bound not to discuss today’s weather with anyone else. While most reasonable people wouldn’t try to sue over this breach, it just goes to show how broad some agreements are.
Another type of contract says that we can’t disclose any confidential methods. In many cases, however, these methods aren’t particularly unique. It’s not unusual to hear about exactly the same idea from another person. Under the typical NDA we see, I couldn’t discuss this idea due to it being covered by a previous NDA.
To deal with this, I make a few recommendations. First, try to get as far as possible without an NDA. Most of our initial client conversations don’t need an NDA. After all, before we get into details I want to make sure that you’re the kind of person that I can work with and that your budget is in line with our costs. I also want to make sure that we have the skills to get your job done. I don’t need to sign an NDA to find out that you’re looking to build a flash game, or that your budget is only $2,000.
If it seems like we might be a good fit for a job, I might be willing to sign an NDA under certain circumstances. Mostly,
- The NDA must be mutual.
- There must be a reasonable time limit. The shorter the better.
- The NDA should be as narrow as possible.
- There must be an escape clause for things I already know or learn from an independent source.
In general, however, I feel like NDAs are a waste of time. When it comes right down to it, there are very few businesses where the idea, if leaked, would cause real problems. Typically, businesses aren’t doing something completely novel where a first mover effect gives them a huge benefit. Ideas are a dime a dozen. Execution is what matters, and an NDA doesn’t help you execute.