"A non-disclosure agreement (NDA), also known as a confidentiality agreement (CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA) or secrecy agreement (SA), is a legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to.
The mutual NDA is when both parties are restricted in their use of the materials provided, or they can restrict the use of material by a single party."
In this agreement you and your client/customer agree not to disclose information covered by the agreement. The NDA creates a confidential relationship between you and the other party, typically to protect any type of confidential and/or proprietary information or trade secrets. The NDA protects non-public business information.
If you are considering doing business and need to understand the processes used in your and or the other party’s business for the purpose of evaluating the potential business relationship you may enter into an NDA before even starting business with your client or customer.
Once you’ve entered an NDA, you may share sensitive information without fear that it will end up in the hands of your competitors and if it does, you will have a right to recourse.
As a freelancer, your position in business may be weaker than that of other businesses that are bigger and more established and thus, is it important that your confidential information is protected to avoid putting yourself at a competitive disadvantage.
NDAs are not limited to a specific freelancer, any freelancer who is sharing confidential information with their clients should consider entering one. If you find yourself in a situation where the information you have to share with your client is confidential and the disclosure of that information would cripple you and your business, then you should consider entering a One-Sided NDA. If your client will also be sharing confidential information, then a Mutual NDA is advisable. However, if you feel like it is not necessary for you to enter an NDA with your clients, your information will still be protected because most agreements still include a confidentiality clause for your protection.
Clauses included in your non-disclosure agreement:
- The names of the parties entering this agreement;
- What is generally defined as confidential information;
- What might reasonably be excluded from confidential information;
- The standard of care required by the recipient of confidential information;
- What the consequences are if confidential information is unlawfully disclosed;
- How long information is required to be kept confidential;
- A non-circumvention clause, prohibiting one party from by-passing the other, and directly contacting a third party which may have been introduced to the other in their dealings;
- Common boilerplate clauses.