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I'm new to freelancing and an international client of mine is interested in hiring me to help with his startup business. In the process, he wants to preserve his intellectual property and has sent me a Non Disclosure Agreement to sign. The agreement contains nothing about the nature of the work or the financial details.
I'm a bit skeptic about this, as a lawyer has suggested that I get all the details in a single agreement.
I'm really confused, and need advice very urgently.
Non-Disclosure Agreements (NDAs) do not state anything about the actual project or compensation. They are an agreement of secrecy separate from any financial arraignment. Because you are being asked to legally promise you will keep the product secret, they will not disclose what the project entails until after you've agreed you will not share those details.
Financial compensation, timeframe, and scope items should be detailed in a separate contract. After the NDA is signed, then the client can share details about the project and you can work out scope and costs.
NDAs are not an agreement to complete work. They are an agreement to keep the clients IP secret regardless of whether or not you do any work for the client. And NDAs are always a separate agreement because you are bound to it above anything else.
I would only add that as a result of my using an NDA with every client, I have learned there are a number of things to watch for in the NDA itself. Very often the NDA and subsequent work agreement are slanted very heavily to the company's advantage. Be especially careful and always feel free to mark up the agreement and ask for changes.
One thing I always like to see is the term "mutual", as in mutual nondisclosure agreement. Naming the company and the contractor as the "parties" and thereafter all provisions apply equally to both parties. In other words we share equally in risk and liability.
I agree with most of the answers given. I would add the following considerations.
If possible, get the NDA to include a time limit. This is typically 1 to 5 years. I explain to clients that I want to take their needs seriously and do not want to agree to something that I cannot uphold. I get worried about keeping secrets longer than 5 years just because they become absorbed in general knowledge and can therefore become part of conversations with others.
Request that all information that is to be considered confidential be marked confidential. Further, request that any information that is transmitted by non-written means and is confidential, be followed up by a written note that says x and y in the conversation of such and such a date was confidential, and that the note be delivered not later than about a week after the conversation.
The NDA should include terms that state that information each of you receive through other means, providing that those means do not violate an NDA, is not confidential information.
I do think that some very general description of what areas of work are being discussed probably does belong in the NDA. Something along the lines of: " the parties wish to work together on a development of xxx and to share information on it". Otherwise it is just too vague.
NDAs are very common in industry. Some companies won't even let you in the door without signing an NDA; you sign an NDA at the same time you sign in the guestbook.
In most cases, the NDA doesn't matter. Unless you intentionally release information that was revealed to you, which is covered by the NDA, you didn't violate the NDA. So: If you sign an NDA, don't talk about the content of the meeting. No problem.
The NDA also aren't easy to enforce. If the company sues you, they have to prove what information they revealed to you and that you released that information. They also have to prove it harmed them.
Agree with the previous.
The NDA is not a work agreement, it only allows you to talk freely with a prospect about their proprietary information. If you both decide a contracting agreement is needed, you then set up the terms, compensation, and I always ask for an SOW (scope of work). If they decide no, then everyone walks away from the table and any surviving aspects of the NDA, remain in place to protect their IP.
~doug
