Non-Disclosure Agreement (NDA)

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What is a NDA?

A Non Disclosure Agreement (NDA) is a really important legally binding contract between two or more parties. Its purpose is to prevent the disclosure of certain confidential information further than those parties. They can be one way (i.e. impose an obligation on one party alone) or two-way (both parties have certain obligations).

Before disclosing any confidential information, a NDA is highly recommended and in some circumstances required to meet professional regulations. Either that you are obliged to keep confidential in the first place – e.g. client records, customer information, bank and credit card details, etc.

If you have a great new idea and want to be first to market, you would be wise to get anyone that comes in contact with the idea to sign an NDA.

Do you really need a Non Disclosure Agreement?

Every person has an opinion or has heard an opinion on whether an NDA is necessary and I don’t think I’ve heard the right one yet. Contact us about our NDA service today.

The simple answer I think is yes (or at the very least heavily considered and get advice), unless you are comfortable to take the risk. It is highly advisable to have one in most circumstances as a starting point. Then, you can consider on a case-by-case basis whether you insist on each individual you decide to disclose. Our team of small business lawyers can provide you with further information.

Needing to tell the world Vs needing to be first to market

Yes, everyone has ideas (most entrepreneurs will have multiple ideas in a given day). In reality it’s the implementation that is more important than the actual idea.

In fact, in some instances, you may want the whole world to hear about your new idea. So you want people you tell to tell as many people as possible to gain market traction or attract the right people to your business. Including a potential investor.

But if you have a very good idea that hasn’t been done in the market yet and you want to be first to market, you would be wise to get anyone that comes in contact with the idea to sign an NDA.

Weighing up the potential of the person you disclose the information to, to then be able with the adequate resources to effectively steal the idea and build it themselves.

Investors will often pull the ‘relationship card’

You will hear investors say: “I don’t need to sign an Non Disclosure Agreement. I speak to hundreds of business owners every year. Don’t you trust me? Relationship is built on trust.” Guilt trip – that old chestnut.

I think you should at least ask them to sign an NDA. Firstly, it demonstrates that you are serious about protecting your IP. It also gives you rights and remedies if they go ahead and steal your idea. Even if it’s just to get someone else to build it.

Most people don’t know the investors they’re pitching at very well if at all. I would be suspicious of any investor that refused to sign an NDA.

Similarly, a web-developer or other contractor who is going to know the way the product/service works in an intimate way, needs to have your complete trust and you need adequate measures in place if they breach it.

It’s just good business.

How Much Does a NDA Cost?

Non Disclosure Agreement Price – Request your NDA

We charge a fixed fee $750 + GST for a tailored NDA.


What signing a Non Disclosure Agreement means

Signing an NDA means that they can’t go off and steal the idea. They can’t pinch your intellectual property. And they can’t disclose confidential information without breaching the agreement. It would give rise to a claim for damages for breach of contract and other remedies.

It also sends a clear message that this idea is important and confidential and must be kept that way. Just telling someone to keep something in confidence is not enough and can lead to he said / she said.

I know it’s uncomfortable asking someone to sign a document before you tell them your idea. But if you want to protect your Intellectual Property, it’s just got to be done.

How long does an NDA last?

The term of a Non-disclosure Agreement (NDA) depends on what is drafted in the agreement itself. It can state that the term is for a set period of time specified in the agreement or the term can be drafted to continue unless terminated by a party to the agreement.

Ideally, if you are the party disclosing confidential information, you should have the agreement to continue unless terminated by a party to ensure the recipient of the information is obligated to maintain confidentiality on an on-going basis as this provides more security that your confidential information will be protected for the longest period possible.

Does an NDA hold up in court?

Whether you’re successful in enforcing your rights under an NDA in court proceedings will depend on a number of factors.

The first, is whether the agreement itself is valid. To ensure an NDA is valid it should be legally drafted and signed by the parties to the agreement. The agreement can’t be too broad in terms of the obligations it is imposing on a party. It’s important to be concise about what confidential information is being protected and how long the protections are in place because if a Court deems the agreement to be unclear on those points, it may be unenforceable. The agreement must also specify who cannot disclose the confidential information.

Once it’s confirmed your NDA is valid and enforceable, the next step is to prove there was a breach of the NDA, which amounted to an actual breach or anticipatory breach.

An actual breach is where you can demonstrate that a party to the NDA disclosed confidential information to a third party without the consent. An anticipatory breach is where a party to the NDA threatens to disclose confidential information and demonstrates a clear intent to breach the NDA.

Keep in mind that it can be quite difficult proving a breach of an NDA, especially if the unauthorised disclosure of confidential information was only verbally disclosed to a third party and there is no written record of the breach taking place.

One of the main benefits of an NDA is it acts as a deterrent for unauthorised disclosures from ever taking place in the first place, but if a breach of the agreement does take place it’s ideal if you have a written record or concrete proof of the breach if you’re considering taking the matter to Court.

What happens if you break a NDA? (or if your NDA is breached)

There can be serious consequences if you breach your obligations under an NDA by leaking or disclosing confidential information or if another party to the agreement discloses your confidential information.

The unauthorised discloser may be subject to Court proceedings where an urgent injunction may be ordered against them to cease from making further disclosures of confidential information or they may be ordered to pay damages, which can be substantial.

An injunction is generally used where there is a threat of breach of the agreement, whereas damages are sought when the unauthorised disclosure has already taken place and the party affected can demonstrate that their business has suffered loss or damage, as a result of the other party leaking confidential information.

“The team at Progressive Legal really takes the time to understand their clients business and needs. We consider the crew an asset to our business.”

Julian Haines, Founder at The Bucks Co.

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