What
An NDA or Non-Disclosure Agreement is an agreement that protects confidential information from being shared.
Many clients will ask you to sign an NDA before they are able to share information about a project with you.
Most NDAs are mutual - meaning both parties agree to keep anything which is shared with them, confidential.
Some NDAs can be really long, wordy and complex, and could include significant risk to you - so it’s important you understand what you’re agreeing to.
Why
NDAs are quite common in a lot of sectors - and your prospect might ask you to sign one before they’ll share information about a project with you.
Even before you’ve signed a contract, an NDA allows a client to share a little more about a project, for example, what the project is, who they are, and what they do, any commercial insights, or perhaps even talking about a secret new product.
Signing an NDA is generally absolutely fine - all it’s saying is that you won’t share the information with anyone else.
But it’s important to understand what you’re agreeing to - as some NDAs can put significant liabilities on you, should the client claim that you’ve shared confidential information. Some NDAs state that you’re responsible for any loss the client suffers as a result of confidential information being shared - sometimes they don’t even need to prove you shared it!
Sometimes, NDAs will also include additional restrictions, such as non-compete clauses or transfer of rights (which you’re within your rights to ask to be removed, if you aren’t even contracted yet). Generally it’s a good idea to keep an NDA focused purely on the issue of confidentiality - and any other topics should be covered by your contract.
As with any legal document, it’s really important to understand what you’re signing before you sign it. Speak to a lawyer or legal profession if you’re unsure, use tools like ChatGPT to ask if there are any concerning clauses, and speak to your community for advice.
Warning for sole-traders …
Sole traders are directly responsible for any breach of an NDA, and the financial consequences could be significant, if you breach an NDA, or have signed an NDA with onerous terms. Consider putting professional indemnity insurance in place, and consider investing in legal advice if you’re unsure.
Bear in mind …
Some NDAs will mean you’re not allowed to share that you’ve worked on a project, or worked for a client (although whether this is ‘confidential’ information or not is open to debate).
This means you might not able to use your work in your portfolio, or use it to demonstrate your experience.
This can be problematic as a new freelancer - as building your portfolio is essential.
If your NDA prevents you from talking about your work, try to negotiate with your client to remove this clause, or get special permission to be able to include the work in your marketing.
What NDAs do not cover …
Not all information shared with you is confidential. But you’ll still need to be careful sharing any information provided to you, even if its not marked as confidential, as it may still be sensitive.
There are some instances where you feel it’s essential to disclose something such as reporting a crime, or a health and safety issue. NDAs do not overrule whistleblowing legislation or your rights to make protected disclosures.
How
1/ Read the resources below on NDAs to understand what they are, and have a look at some examples.
2/ When you receive an NDA, read it carefully, and get advice if you’re unsure.
3/ Use tools like ChatGPT to ask if there are any concerning clauses.
3/ It can be useful to have your own NDA too, in case you’re working with partners.
4/ Remember that if you’re subcontracting any work, it’s likely they’ll need to be covered under an NDA too.
5/ Professional Indemnity insurance can cover you for any claims of breach of NDA. Explore insurance if you’re signing up to contracts which have some form of liability.
