Do you need a nondisclosure agreement to protect your custom software? Learn when NDAs are necessary and what to include
What is a Mutual NDA?
A non-disclosure agreement (Mutual NDA) is a legal contract between parties, such as the software developer (or a software development firm) and yourself, outlining information to be shared and requiring that information be kept confidential.
Mutual NDAs are commonly used when parties consider entering a business relationship, such as 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 Mutual NDA by sharing confidential information the other party may seek legal recourse.
What are the Components of a Mutual NDA?
Mutual NDAs comes 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 Mutual NDAs include the following components
Identification of parties involved
Defines of what information is considered confidential and therefore covered within the agreement as well as identifies any exclusions from confidential treatment.
Duration of term
Defines the timeframe in which the agreement is valid as well as the requirement of return or destruction of confidential information upon termination of the agreement.
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.
Why is it Important to have a Mutual NDA for Software Development?
Mutual NDAs are becoming more commonplace in the software development industry due to the sensitive nature and purpose of software prior to publishing.
Protect trade secrets
Keep product in secret
Working with external specialists
Secure confidential information
When not to sign
an Mutual NDA?
Using information that is public information
Initial stages of looking for contractor
Only have an “idea”
When to sign
an Mutual NDA?
Want project to remain private and hidden
Working with independent contractors
Confidential information to protect