6 Reasons to use NDA for IT Development

When it comes to IT development, the use of a Non-Disclosure Agreement (NDA) is something that the hiring party needs to consider. An NDA is something you can completely forgo or it is something you can request for every project you have someone complete for you. You’re going to want to consider if the NDA is truly necessary and if it is, you’ll need to find a moderate approach to requesting NDAs.

If you skip getting an NDA all together, you may ruin the success of your project before it’s ever launched. If you ask for an NDA all the time, you’re going to overwhelm, not just yourself, but the other party with cumbersome paperwork. So what are you to do?

Key Elements of NDA

While there are cases when the non-disclosure agreement is many pages long, it doesn't have to be. Here are the key elements of the NDA document:

  1. Identify the parties involved (for example, your company and the subcontractor)
  2. Define what information should remain confidential (for example, your special algorithm should not be shared with anyone)
  3. Describe the scope of the confidentiality obligation
  4. Name the information that is excluded from the confidential data (i.e. what can be shared)
  5. Write terms of the agreement (for example, what happens in case the data is shared)

Here are six reasons why and when you should be asking for NDAs.

Reason 1: Protecting the Originality of Method

If you’re at the stage of discussion where you are transitioning from simply talking about your ideas in a basic sense to discussing your specific method for how you’ll do things, you are at the point where you should be asking for an NDA. Ideas are not something that falls under copyright protection, but you can protect your specific methodology using an NDA.

If you want to keep your ideas secretive, don’t discuss them a lot with others and keep your conversations between you and the IT developer. When you start delving into the “how-tos” get that NDA. When you start sharing data and documentation, again it’s time for an NDA.

Reason 2: Working with Independent Contractors & Vendors

When you are looking to use the services of someone outside your business, like vendors or independent contractors, it’s a good idea to have the individuals sign an NDA. You can have them sign it and keep it on file, thereby protecting you in the immediate and distant future.

Alternatively, if you are looking to work with some people who will be financially backing your project or business, asking for an NDA might not be a great idea. Many investors do not care for NDA, so it is best to refrain from asking for one.

If you're not 100% sure they won't take your idea and move on with it without you - consider a non-compete clause (NCC) in your contract, which should protect you from having your ideas exploited.

Reason 3: Big Money Projects

If your spending a big bankroll on a project, get an NDA. You don’t want to dump a lot of money into your project only to have your ideas given away. In the worst case scenario, your investment becomes a donation when your project is leaked to the public.

Reason 4: Protecting Trade Secrets

Trade secrets are often that one thing that helps you stand apart from your competitors - it varies from business to business and can be anything from a special way your shoe business does stitching to a secret ingredient in a soup to a unique algorithm that helps your big data adtech project process information.  

Like Kentucky Fried Chicken, Pepsi, and Coca-Cola, if you’ve got a big trade secret to protect, you’ll definitely want NDAs. 

Reason 5: Protect Business Relationships

When looking to maintain business relationships, getting NDAs can sometimes benefit the relationship, especially if there is a concern that one party may interfere with the other party’s business operations. If you are looking to get an NDA just to protect your trade secret (something that you never really have to talk about) you can just refrain from discussing it and do away with the need for an NDA entirely.

Reason 6: Access to Sensitive Information

One more reason to consider signing a non-disclosure agreement is when your project is dealing with sensitive information, such as healthcare issues, or financial data, or anything else that should remain private to the public. Even if it is something seemingly trivial, it might not always be that. 

An NDA, in this case, sets boundaries to what information is permitted to be shared with third-parties and what information is confidential. 

To Use NDA or Not to Use, That Is the Question

The bottom line is - remember that NDAs won't protect you from everything. People are people and things happen. Also, remember that business partnerships should be based on trust primarily and not just a contract's signatures. If you're not sure whether you can partner with someone without an NDA - well, perhaps it's better not to be partners.

At the same time, NDAs create a safe environment where everyone is on the same page regarding the information rules, so if you have a team working on your project, it would be a useful thing. 

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Igor Tkachenko
