When to sign an NDA contract and when not

by Xavi Esteve
on February 14, 2013
(3 minute read)

Non-Disclosure Agreements are ment to protect intellectual property and while they may sound pretty helpful, if you are the person signing them you should think twice before doing so, even more if you are a freelancer and work for different clients on a constant basis.

Do not sign any NDA that locks you for a long time

“the only reason to want me to sign one is so that it’s easier to sue me in the future” –Dave

As a freelancer, it is not worth signing an NDA that is not worth the project. I was once offered a 5 year NDA for a 1,000€ project. What if that professional relationship ends in 2 months and a new client with a similar idea offers me a new project? I couldn’t take it. I would be stuck for 5 years without being able to accept anything related to that NDA-signed project, even for slightly competitive markets because, at the end of the day, if that NDA-client was a troll he could hire an experienced lawyer to relate both projects somehow and take me to trial just to end up paying a hefty compensation or wasting uncountable hours with lawyers, legal jargon and judges instead of working on making websites.

Clients need to trust you without the need of an NDA

As a web developer it is my main priority to keep my clients’ confidentiality, when you hire a professional you need to rely on him and put your business in his hands so he can help you get a great job done. All serious developers have access to confidential data, including server passwords, database access, Adwords budgets and so on. Any developer that doesn’t keep sensitive information confidential and takes care of his client’s secrets has a very short future in this market. And clients should know that.

“building it takes the first 80%, marketing takes the other 80%” –James

After all, a great idea is nothing without a great execution, including a strong network, marketing campaigns and customer support. A client should know that, if the client is scared that you can copy his idea and run away it means he is not confident or good enough to market his idea. But it doesn’t make sense to run away, the client already has all the business plan set up, a team of experts in other fields and an investor or the funds to run the project. Why would a developer run away with the idea and have to start setting the whole thing again?

Here’s the letter I sent my prospective client telling him that I would not sign the NDA.

Hi [client],

Thanks for getting back to me. After thinking on this, I can build the prototype with 
just the information I have and it is not convenient for me to sign a 3-5 year NDA for 
a one week project. Signing this would make me unable to accept any other social media 
related projects until 2017. For example, if another client contacted me with a 6-month 
project that uses the Twitter API I could be liable for breaking a legal document.

We web developers and IT professionals have access to very sensitive data (server and 
database full access, companies client information, full control on their website...) 
and although we have great power, all of us know that our clients' information is sacred 
if we want to stay in business.

I am keen on building a prototype for you and pretty confident we can make a great team 
together, I can start building a prototype with just the information I have right now so 
you wouldn't need to provide any confidential information at all.

Please let me know your thoughts on this, hope you understand that I can't lock myself 
for 5 years for a one week project.

Thank you,

Xavi

I didn’t get a reply back from that person ever again, guess it was for the best.