Key considerations when drafting an NDA

Intro

Collaboration is built on trust. In the world of software development and IT, sensitive data is often shared: from source codes and prototypes to strategic plans. How do you ensure this information doesn't fall into the wrong hands? A non-disclosure agreement (NDA) offers protection. In this article, we explain what to look out for when drafting or signing an NDA, so your interests as a client or software partner are well protected.

What is an NDA?

An NDA is a legal contract where parties agree not to disclose or share certain information with third parties. In software projects, such as those developed by APPelit for clients, an NDA is often signed early in the process. This guarantees that sensitive details about systems, concepts or business models remain confidential.

When do you need an NDA?

You should have an NDA in place as soon as confidential business information is shared externally. Examples include:

• hiring a software developer like APPelit

• discussing an IT project or custom solution

• sharing internal processes with consultants

• entering into talks about potential mergers or acquisitions

An NDA prevents misunderstandings and provides legal protection if confidential data is misused.

Key elements of an NDA

1. Clearly define confidential information

Be specific about what is considered confidential, such as source codes, technical documentation, customer data or business concepts.

2. Set a clear confidentiality period

Most NDAs in IT projects last between 2 and 5 years, depending on the sensitivity of the information.

3. Define exclusions

State what information is not covered by the NDA, such as information already in the public domain or previously known by the receiving party.

4. Define obligations and responsibilities

Clarify how the information should be handled. For example, limit access to only those employees who need it to complete their work.

5. Include consequences for breaches

Describe the penalties for any breaches of the NDA, including fines or compensation.

6. Specify jurisdiction

State which country's laws apply in case of disputes. This prevents lengthy discussions later.

Unilateral or mutual NDA?

There are two common types of NDAs:

• unilateral – one party shares information, the other party agrees to keep it confidential

• mutual – both parties exchange confidential information and agree to protect it

In software development, a mutual NDA is often preferred since both client and provider share valuable data.

Tailor your NDA to your project

Standard NDA templates offer basic protection but rarely cover the complexity of software projects. At AltF7, we recommend that clients always opt for a customized NDA tailored to the specific project and industry.

A well-written NDA prevents legal uncertainty and establishes a strong, secure working relationship from the very start.

Do you want to ensure your business interests are fully protected during your next software project? Our experts at AltF7 are happy to help you with legal agreements and security measures for your collaboration.

Contact us today to discuss your project and the best NDA setup.