IT suppliers don’t need to sign an NDA. Here’s why.
Published on June 24, 2016
Last modified on February 23, 2021
Published on June 24, 2016
Last modified on February 23, 2021
Imagine that you have made a very innovative and essential project for your company. If your competitor finds out what you did and copies it, there is a risk that he’ll reach the market before you do.
The solution to such instance is a Non-disclosure agreement (NDA). Or is it?
There are two types of NDA contracts―or rather, there are two types of companies that sign NDAs:
Continue reading this blog to understand why.
When a supplier signs an NDA, they need to take various precautions to ensure that they are complying with what they signed—and the thing is, it costs money to 100% comply with an NDA. For starters, they have to make sure that:
In addition, the team that will work on the project must be informed and briefed about the NDA and be willing to comply with it 100%.
Two programmers, let’s call them ‘Programmer A’ and ‘Programmer B’, work in the same IT company.
Programmer A works for a client with whom an NDA was signed.
Programmer B works for a client who is a competitor of Programmer A's client, and with whom there is no NDA.
An unfortunate accident happens to Programmer B, making him unable to work for two months. Things could have been easier for the IT company if they could assign Programmer A to work on Programmer B’s tasks.
However, this is not possible because of the NDA with Programmer A’s client. In small businesses, this is not practical and can be a huge problem.
Often, but not always, it doesn’t matter whether you have an NDA or not.
In 80% of all businesses, the only secret that you have to protect from competitors is what goes on in the marketing department.
The other 20% is composed of companies that are in the business of producing high-tech systems, therefore requiring NDAs.
If I were to take time to have an NDA with a supplier, I would focus on my AdWords consultant, SEO specialist, business consultant, and the likes. These are the people who have a deeper insight into how the company is running, what the company’s future plans are, and even how the company acquires new clients.
But overall, the important thing to remember is this: a contract is only worth something if you actually enforce it. Keep this in mind the next time that you need to put an NDA in place with a supplier.
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