Freelancing and the NDA

Our first stop in legal week is the NDA.

What is an NDA?

We’ll start by defining what an NDA is. According to Wikipedia an NDA is:

An NDA creates a confidential relationship between the parties to protect any type of confidential and proprietary information or trade secrets. As such, an NDA protects nonpublic business information.

That’s not buried in too much legal jargon but let me say it again. An NDA only covers any knowledge that the client has that is a trade secret. It can’t cover common knowledge items, because every one knows it already.
One of the things that I signed an NDA for is my work with a corporate trainer. I have agreed not to disclose how he interacts with his clients. So all the cool commenting systems, dashboards and custom interactions I built can’t be shown in the context of his client interactions.

I am allowed to give screencast demos to potential clients showing off the work but even then I have a ‘demo’ install that shows none if his site user’s information.

I can also release code showing how to add a comment area where you can comment on users (as in make personal comments) but again, it’s abstracted from the original project and I have to run it by him first. I do get to show my work, but not his business process.

I generally think it’s good practice not to say a bunch about how your client runs their business or your work without talking to them about it anyway. You just never know what parts of a business a client will be defensive about and 99% of the time one portfolio piece is not worth loosing a long term client.

Do you sign it?

Before I get into my opinion I should point out that some people are totally against NDA’s. They feel that it starts the whole relationship off on the wrong foot. It starts from a point of mistrust of each other.

I’m always going to say that it depends on the client and the project. Any time I’ve signed an NDA the idea being protected was something along the lines of the ‘next Facebook but for dogs.’ That’s saying it was a totally dumb idea and the whole endeavour was a waste of my time. Unfortunately I only found my time was wasted after the NDA was signed.

Would I sign an NDA for a local mom and pops business (that just happens to have a lawyer friend/family that recommends NDA’s)? No I wouldn’t sign an NDA for them. It’s highly unlikely that they have any real trade secrets that need protecting and I simply can’t be bothered with the leg work to make sure the NDA is something decent for me to sign (see the lawyer stuff later).

If Coca-Cola came to me and wanted me to sign an NDA would I? I’d at least read it very carefully to see what it limits me from talking about. Remember that with Coca-Cola you can up your rates a bunch so that NDA is a trade off which may make an NDA acceptable.

I would charge to sign an NDA even if I’m not getting the project. The simple fact that the site owner is exerting some control over how I do business means they have to pay for the right. Further more you want a lawyer to look over that NDA and let you know about any problem areas. Lawyers cost money and that fee is something the client should bare since they want an NDA.

If you’re looking for an NDA template the Three Wise Monkeys’ is a great starting place. It’s not bogged down with legal language you can’t understand and it’s free to use.

Please remember that I am not a lawyer, nor am I familiar with contract laws in all parts of the world, this is what I have learned through my experiences running my business. If you are seeking legal advice please do so through a lawyer in your area.

photo credit: NobMouse via photopin cc

2 thoughts on “Freelancing and the NDA

  1. I’d bet for most freelancers it’s often signed, rarely read. I think most people send me NDA’s because they think they should, and often they don’t even understand them. I admittedly usually just skim them. If it’s a large corporation like you mention, I will let them know we need to enter a discovery like phase to:

    a) cover legal costs
    b) properly scope out what they need

    They are more than welcome to take that elsewhere when done if we’re not a fit.

    1. Very true, big corps do expect to pay for the time on the legal wrangling.

      I read them (just signed one this weekend actually) if they’re a page or so. If they’re way longer then I say I have to charge for my lawyer to look at it.

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