Developing a software program is a game-changer for any business or individual. Whether you’re selling that software program to customers or using it to increase performance and efficiency within your own company, your opportunities are limitless with software development.
With that said, software development comes with a great deal of risk and jeopardy — especially when outsourcing development to another company. As much as your idea means to you, there is a wide range of people out there that would love to steal that idea and claim it as their own.
It’s an unfortunate part of doing business, but it’s a reality nonetheless. Luckily, there are ways to protect your idea and maintain the integrity surrounding the software development process. Of all the things you can do, nothing is more important than signing an NDA prior to inception.
An NDA, also known as a non-disclosure agreement, is a legal contract between two parties, such as the software developer (or software development firm) and yourself. It outlines the information being shared and requires that information remain confidential throughout the development process.
The use of an NDA comes in handy when two parties are considering entering a business relationship, such as a custom software development project. It allows a company to properly evaluate the potential relationship without fear of confidential information being stolen, exposed, or compromised.
In the event a party breaches the non-disclosure agreement by sharing confidential information, such as trade secrets or unique ideas, the other party may seek legal recourse as a form of retribution. It will certainly make the party think twice before sharing sensitive information with someone outside of your company.
No two NDAs are the same. Since there’s no standard template when creating a non-disclosure agreement, it’s going to look, read, and sound different every single time. Some are going to be short and sweet, while others will be long and filled with legalese — it all depends on the situation.
While the NDAs language and style will vary depending on the nature of the parties’ relationship and the information being shared, there are several components that every NDA should include:
The non-disclosure agreement can be as complex or as simple as you need, so long as it contains everything you need it to contain and it’s signed by both parties. The more complex it is, however, the harder it will be for the other party to find loopholes and take advantage of it.
An NDA is becoming more commonplace in the software development industry, largely due to the sensitive nature and purpose of software prior to completion. It’s often the first thing a company thinks of before they start the development process or during the initial interviews.
Let’s take a look at some of the most prominent reasons why an NDA is important when outsourcing software development to an outside company:
At the end of the day, a non-disclosure agreement is designed to protect your company and protect your software idea from unloyal or untrustworthy parties. If you care about your idea and what’s best for your company, signing an NDA should become a standard practice for you.
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Many companies are likely asking themselves when a non-disclosure agreement should be signed for software development. The truth is there are plenty of scenarios and situations where an NDA is recommended, and it’s better to be prepared for those situations when they arrive.
Let’s take a look at some of the most prominent situations that often call for an NDA for software development:
The best time to have someone sign an NDA would be before revealing any private, confidential, or sensitive information. It’s always a good idea to get it out of the way as soon as possible, but it’s never too late to have someone sign it — even if they’ve already been hired for the project.
Of all the reasons why you should sign an NDA, it might come as a surprise that they’re not needed 100% of the time. Believe it or not, some situations aren’t going to be as threatening to your software project or plan as others — and won’t always call for a non-disclosure agreement.
To ensure you understand this, let’s take a look at some of the situations where an NDA for software development isn’t necessarily required:
While an NDA might not be required in these situations, that doesn’t mean you can’t have one signed. It can still serve a variety of purposes in the off-chance that sensitive information is leaked by accident. It’ll let the other party know what’s protected and what’s not protected.
Now that you know when and when not to sign an NDA when developing a software program, it’s time to discuss who you should sign an NDA with. Since there are likely going to be a wide variety of people working on the project, you want to make sure everyone’s on the same page.
Here’s a quick breakdown of the parties that should be involved in signing a non-disclosure agreement, especially if they’ll be exposed to private, confidential, or sensitive information:
What’s most important here is that you protect yourself from anyone that will have access to your most sensitive information. Every situation and project is different, so make sure you think hard about who you’ll be coming in contact with throughout the software development process.
Every decision you make prior to, during, and after the software development process comes with its own set of pros and cons. Being able to identify those pros and cons is vital to making the right decisions for you and your idea — especially when introducing an NDA to the process.
Don’t worry, we’re going to detail some of the most prominent benefits and downfalls that come with signing a non-disclosure agreement for software development.
Let’s first take a look at the pros of signing an NDA:
Now, let’s take a look at the cons of signing an NDA:
With these pros and cons clearly identified, you can easily make a better decision when trying to decide whether a non-disclosure agreement is worth it for your project. It comes with some benefits that can save your company’s idea from theft, but it won’t come without some risk.
A non-disclosure agreement is an essential part of software development, but many companies aren’t aware that there are several different types of NDAs that each serve a unique purpose. Understanding which one is relevant to your project is very important before you create one.
Don’t worry, we’re going to detail the three most popular types of NDAs that are commonly used throughout the software development process:
To summarize, you’re going to want to write a unilateral NDA if you’re the only one that’s sharing sensitive information. If both parties have confidential information to share, a mutual NDA is needed. If there are more than two parties involved, then you’ll need to sign a multilateral NDA.
Believe it or not, there’s an art to properly asking a software developer to sign an NDA. In fact, not asking it properly could result in the software developer not feeling comfortable about having to sign one and could result in that developer losing interest in being included in your project.
If you want to ensure your potential software developer — as well as anyone else you have signing the NDA — is comfortable with the presence of an NDA for software development, follow these important tips:
At the end of the day, you don’t want to offend the other party when asking them to sign an NDA. Instead, you want to make them feel comfortable and confident that signing an NDA is both a good decision and necessary for a successful working relationship. Here’s a perfect example:
In an effort to sustain, preserve, and protect the integrity of our objective with future investors, developers, and contractors, we politely ask that everyone closely involved with our idea during this stage of the process sign an NDA as a formality. We highly appreciate your cooperation.
Getting a lawyer’s help when writing an NDA isn’t necessary, but that doesn’t mean it can’t help you. Lawyers are extremely talented and knowledgeable when it comes to fitting the right language in an NDA. They can also ensure you add the right pieces of information in the NDA.
With that said, the use of a lawyer largely depends on how complex you’re trying to make the NDA. In most cases, the NDA will be rather simple and straight to the point, meaning a lawyer won’t be needed. In other cases, a lawyer can certainly help make your NDA more in-depth.
Of course, you have to keep in mind that a lawyer will cost money and it’ll add to the cost of getting your project started. It might help you protect the right information, but you have to weigh that against the cost of their services.
At CodeBright, we fully understand the benefits of signing an NDA prior to the software development process. We have experience as both the receiving party and the disclosing party, so we’re no strangers to the use of an NDA and fully recommend them in most cases.
If you’re convinced it can help you find success with your software project, especially after reading through all the valuable and useful information we’ve provided above, then you’re likely looking for a sample or a template to follow when creating your own non-disclosure agreement.
Don’t worry, we’ve got you covered. Follow the link below for an editable NDA template that you can start using with your software project today!
By now, you’ve pretty much learned everything there is to know about an NDA for software development. Of course, you likely still have several questions running through your mind. To ensure we don’t leave any information behind, we’ll answer some of those questions below!
If you’re looking for a software developer that takes your confidential information seriously, you’ve come to the right place. CodeBright is one of the highest-rated software developers today and we’re excited to have an opportunity to share our passion with you and your team. Contact us today for more information or to schedule a consultation!
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.
