I saw (and answered) this question on Quora recently, and wanted to expand upon it here, as well, as it’s a fairly common, and important, topic in the web development world, and in the business world in general. While I deal with these things regularly, and am offering my take herein, please keep in mind that I’m not a lawyer. So, you should research this on your own, as well!
Let’s start with the basics: An NDA is a Non-Disclosure Agreement. Basically, it is a document used to ensure that, when you share proprietary information with another person, that person agrees not to disclose it to anyone. Typically, it is offered by one party prior to any proprietary information being shared with another, thus ensuring a safe environment in which to disclose such particulars.
Obviously, this crops up in web development business transactions regularly, for a few reasons:
- For many new sites, the site is the business idea. For example, it could be that a web site is providing some new, novel service previously unavailable, or the owner has envisioned a new web-based service that no one else has thought of.
- Even if I’m not the developer of a new technology, I may well need to be informed about proprietary business processes, trade secrets, and/or other non-public aspects of the business in order to build the web site.
In either case, clients need feel sure that they can fully, and safely outline their idea so that I can build a budget for building their dream. It makes a lot of sense, and is such an important topic that I actually also have my own NDA language within my standard service contract, so that ALL of my clients (even the ones who didn’t ask) actually benefit from NDA language.
NDA Example Language
NDAs can be fairly brief, actually, in case you’re looking for a succinct example to start with for your own NDA. Here is what I use, which was culled from numerous other NDAs and assembled into the following (and which you’re free to use as well):
Confidentiality / Blanket NDA Provision. Either party may, in connection with this Agreement, disclose to the other party information considered confidential and proprietary to the disclosing party (hereinafter “Confidential Information”). Confidential Information shall include either party’s financial information, whether disclosed in tangible or intangible form; terms and pricing under this Agreement; and any other non-public information identified as confidential by the disclosing party at the time of disclosure, or which by its nature is normally considered confidential, such as information related to past, present, or future research, development, or business affairs, any proprietary products, materials or methodologies, or any other information which provides the disclosing party with a competitive advantage. The receiving party shall protect the disclosing party’s Confidential Information with the same degree of care that it regularly uses to protect its own Confidential Information from unauthorized use or disclosure, but in no event with less than a reasonable degree of care. No rights or licenses under patents, trademarks, or copyrights are granted or implied by any disclosure of Confidential Information. This Section shall survive the expiration or termination of this Agreement.
Obligations of confidentiality imposed by this Agreement shall not apply to any Confidential Information that: (1) is rightfully received from a third party without accompanying markings or disclosure restrictions; (2) is independently developed by employees of the receiving party who have not had access to such Confidential Information; (3) is or becomes publicly available through no wrongful act of the receiving party; (4) is already known by the receiving party as evidenced by documentation bearing a date prior to the date of disclosure; or (5) is approved for release in writing by an authorized representative of the disclosing party.
But, Are NDA’s Necessary?
Well, as I said, all of my clients get them by default. But, it’s good to understand how they’re used, and by whom, to know if you should have one in place.
Usually, the NDA requests I get from clients come from startups or other sites that are doing something proprietary in nature. They have the next big idea, for example, and don’t want some programmer running off with it.
I don’t blame them for a bit of paranoia, there, although some people get a little carried away with the legalese. A solid NDA can and should be a half-page, or even a few paragraphs, such as the example above— not some three-page monstrosity some people send me (which I often do not sign).
But, yeah, if you’ve though of some new web-based service and/or envisioned new tech, then an NDA makes perfect sense, and is reasonable to request that someone sign off before you discuss particulars.
On the other hand, if your site doesn’t contain any trade secrets or other proprietary technology that the programmer will have access to, then an NDA is probably not necessary, as there is nothing you’ll be protecting. So, for example, if you just have a “marketing brochure”-type web site, there isn’t much about your business that an NDA would apply to. That goes doubly if it’s a simple marketing site built on any open-source CMS like Joomla or Wordpress, for example.
Obviously, though, one could make the argument that things like site and server credentials / passwords, etc. constitute this type of private information. But, in my experience that’s not what NDAs are meant to protect. And, besides, if that’s all you’re concerned about, you can write that in one sentence and have the developer sign that.
You might also like: My full service contract, explained: