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NDA and how it affects your design business
A non-disclosure agreement (NDA) can also be called a confidentiality agreement (CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA), or secrecy agreement (SA), Regardless of the term used, it is a contract through which parties agree not to disclose information covered by the agreement.
As a designer, you may be asked by your clients to sign an NDA before receiving information required to work on their design project. In this episode of the Resourceful Designer podcast, I discuss what goes into an NDA and how it affects your design business. I go into much more detail on the podcast so please listen to hear the full story.
When should you agree to sign an NDA?
There are many instances when you may be asked to sign an NDA, but the main one is when your client needs to share valuable information with you and wants to ensure you don't steal or use that information without their approval.
Here are some examples of when you may be asked to sign an NDA.
- You are asked to design something that will be used to present to potential partners, investors or distributors.
- You will be designing something that includes financial, marketing and other sensitive information that could hurt your client if that information got out.
- You are asked to design something that is to be kept confidential until a certain date or a fixed amount of time passes.
- You are asked to design something that will give you access to sensitive, confidential or proprietary information.
According to LegalZoom, it is not only about the type of information you or your client would like to protect. It is important to evaluate and understand the situation for signing an NDA, as it may influence the type of contract you need. For example, you may be asked to sign an NDA to get/provide feedback on your work or this can be an NDA as part of a contractor relationship. On LegalZoom, you can use online NDA form in which you are asked all important questions and your replies are used to form a legally-binding non-disclosure agreement.
Mutual and Non-Mutual NDAs
There are two kinds of NDAs, mutual and non-mutual. As a designer, you will most likely be dealing with the non-mutual version. A Mutual NDA is used when both parties will be sharing confidential information with each other. A Non-Mutual NDA is used when only one of the parties will be sharing confidential information with the other party.
What are the key elements of an NDA?
An NDA doesn't have to be complicated. In fact, an NDA could be written in just a few paragraphs. Regardless of its length, an NDA should contain the following key elements.
Identification of all parties involved.
If you work with a team or any third parties will be involved with the project you will want to ensure that any NDA you sign allows for you to share the confidential information with them.
Definition of what is deemed to be confidential.
The NDA should state what information is deemed confidential. Your client may want all shared information to be included, but you should request clarification as to exactly what you are and are not allowed to divulge.
Stating your obligations are after signing the NDA.
You are responsible for making sure the information in your care doesn’t get out. This includes any information shared with your team since you are responsible for them under the NDA.
You are also obliged to refrain from using any information shared with you for your own ends.
What is excluded from the NDA
Information that is too broad or too burdensome for you to keep confidential should be excluded from the NDA. Also, any information that you already knew before taking on the project such as information that is public knowledge or information provided to you by a third party who is not under an NDA.
Any requests to obtain the confidential information presented to you through a legal process should supercede the NDA.
Terms of the agreement.
The terms of the agreement should state the duration of the NDA, and what you can do after the NDA ends. As a designer, this section is important as it should state if and when you may be able to use your designed pieces in your portfolio and whether or not you can claim a working relationship with the client.
An NDA is a contract
Since an NDA is a contract, it can be negotiated. Don't be afraid to question any parts of the NDA or to request changes if you find parts of the NDA are not in your best interest. An NDA offers protection for all involved parties so make sure your interests are covered.
Consequences of breaking an NDA
Because an NDA is a contract, breaking it can have severe consequences. Not only can you lose the project and the client if you break an NDA, but the damage to your reputation as a designer and business person could be irreparable.
More severe consequences can include a court-ordered cease and desist, being sued for damages by the client and even prosecution depending on the sensitivity of the information involved.
Issuing your own NDA
Up until this point, I've been talking about NDAs issued by your clients. However, as a designer and business owner you may find it necessary to issue your own NDA to contractors, team members, and third parties for certain projects you are working on. Everything discussed above still applies but from the point of view of the issuer instead of the recipient.
An NDA is made to protect all parties involved. Signing one is not a scary ordeal. In fact, you should view it as an honour that your client trusts you enough to share sensitive information with you. It's one more step in building a solid client relationship.
Want to see what an NDA looks like? You can download a sample NDA along with other business forms at https://www.allbusiness.com/forms-agreements
Have you ever had to sign an NDA?
Let me know your experiences with NDAs by leaving me a comment for this episode.
Questions of the Week
Submit your question to be featured in a future episode of the podcast by visiting the feedback page.
This week’s question comes from Emma
Adobe has a lot of software available, including a lot of new ones like Dimensions, Spark and Muse, but which would you advise learning to boost your design capabilities above the usual Photoshop, Illustrator and InDesign? Alternatively, is there a software outside Adobe that you would recommend learning?
To find out what I told Emma you’ll have to listen to the podcast.
Resource of the week A Mailbox
This week's resource is a bit different. It's not an App or software to even a tool to help you with your designing. But it is a valuable resource for your design business. If you are a home-based designer, you may be tempted to share your home address with your clients. Let me share with you a couple of reasons why this may be a bad idea.
- Sharing your home address may put your family and loved ones at risk.
- Informing your clients that you will be away on holiday also informs them that your home will be vacant.
- If you ever move, you will need to update your address everywhere which could be burdensome.
A better idea is to get a mailbox at a local postal outlet or UPS Store. This has the added benefit of ensuring your mail is taken care of regardless of whether you are home or not. The UPS Store has the added benefit of calling their boxes “suites” instead of Post Office Boxes. Many companies will not ship to a P.O. Box but will ship to a “suite” at a UPS Store. Plus, employees at The UPS Store are available to sign for packages on your behalf, so you never miss a shipment. And don't forget, you can write off a mailbox as a business expense.
Thank you to this week's sponsor, Storyblocks. Save on Millions of stock photos, vectors and more at Storyblocks.
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Running a graphic design or web design business all by yourself isn't easy. If there are any struggles you face running your design business, please reach out to me. I'll do my best to help you by addressing your issues in a future blog post or podcast episode here at Resourceful Designer. You can reach me at email@example.com