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What is a Non-Disclosure Agreement for Software Development?
A Non-Disclosure Agreement (NDA) is a legal contract between parties, such as the software developer (or a software development firm) and yourself, outlining the information to be shared and requiring that information be kept confidential.
Non-Disclosure Agreements are commonly used when parties consider entering a business relationship, such as a custom software development project, and require the sharing of confidential information to evaluate this potential relationship without fear of confidential information, such as trade secrets, being exposed or stolen.
If a party breaches the Non-Disclosure Agreement for software development by sharing confidential information the other party may seek legal recourse.
What are the components of a Non-Disclosure Agreement for Software Development?
Non-Disclosure Agreements come in all forms, long and full of legalese or short and simple, dependent on the nature of the parties’ relationship and the information to be shared. Regardless of their complexity or simplicity, Non-Disclosure Agreements for software development include the following components:
- Identification of parties involved – Identifies the Disclosing and Recipient parties.
- Definition of confidential information – Defines what information is considered confidential and therefore covered within the agreement as well as identifies any exclusions from confidential treatment.
- Disclosure of confidential information – Specifies how the disclosed information may or may not be used as well as reasonable measures required to avoid unauthorized disclosure.
- Duration of the term – Defines the timeframe in which the agreement is valid (typically 1-3 years) as well as the requirement of return or destruction of confidential information upon termination of the agreement.
Why is it important to have a Non-Disclosure Agreement for software development?
Non-Disclosure Agreements for software development are becoming more commonplace in the software development industry due to the sensitive nature and purpose of software prior to publishing.
- Protect trade secrets – Non-Disclosure Agreements for software development are used to protect trade secrets, and thus your business, from competitors. This could be processes and procedures, marketing schemes, and development strategies.
- Secure confidential information – Confidential information is shared between parties in the development stages and can include passwords, customer lists, blueprints, prototypes, as well as source code, software products, business plans, analytical data, and more. A Non-Disclosure Agreement for software development further protects this information.
- Minimize risks when working with external specialists (freelancers/consultants)
- Stealth mode – develop a product while keeping it secret from the public
When not to sign a Non-Disclosure Agreement for software development?
- Initial stages of looking for a contractor
- Only have an “idea”
- Using information that is public information
When to sign a Non-Disclosure Agreement for software development?
- Confidential information to protect
- Want a project to remain private and hidden
- Short duration
- Working with independent contractors
Download NDA for Software Development (editable doc):
Download sample PDF (not editable).
Disclaimer: This post is provided for informational purposes only and should not be considered legal advice. It is recommended to consult with the appropriate legal professionals or licensed attorneys for advice pertaining to specific business needs.