

How effective are NDAs? - Apane101

I&#x27;ve been asked to sign an NDA by a company who&#x27;d like to use my development services. They already gave me a run down of their entire company strategy post NDA. I&#x27;m curious how effective are NDAs anyway? I&#x27;m aware that they are only effective if the party chooses to pursue a case, but my intuition tells me that they&#x27;re more of a preventative smoke screen than a viable document.<p>Thoughts?
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smt88
Depends on how powerful each party is.

As an individual or small company, the NDAs you give to others are totally
meaningless. You generally don't have the desire/funds to pursue people who
violate the contract, and it's often difficult to prove anything.

Large/smart companies will also realize that they have all the power, and
they'll include upper limits to the damages they have to pay. One of my
companies was recently, egregiously ripped off by one of the 3 largest
insurance companies in the world, and they had capped their liability at
$100k. Fortunately, there was easy-to-prove malice, so they will end up having
to pay us some day.

If you're the one signing the NDA and the other party is large and powerful,
you actually could be successfully sued.

So in short: NDAs are powerful when you have the resources to back them up
with lawsuits. As a developer, I've signed NDAs and non-competes for many
small-to-medium businesses, and I've never been tempted to violate them, so I
can't attest to the validity of that situation.

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Apane101
Fair enough, in my particular case it's complicated for example - before I
even began speaking with this client, I already began coding an application in
a particular niche space... it so happens that this client is also in the same
space. However, my application is totally different, I just hope that there
isn't an issue there because technically, I'm not stealing anything
proprietary, and my app is obviously different. I just wonder, how that works.

~~~
smt88
It's very likely that they could pursue you legally for releasing your app in
the same space after working on theirs. They might be ultimately destined to
lose, but they'd pursue you based on the fact that you don't have the
resources to fight them.

So by signing this NDA, you are very likely (in effect) saying that you won't
release your app or discuss it. It depends on the exact wording, though.

If your app is important to you, you need do one or more of the following:

1\. Ask the company directly about the release of your app and get it in
writing that your app is not their property and that you can release it
without violating agreements with them.

2\. Talk to a lawyer

(I'm not a lawyer and am not giving you legal advice)

~~~
Apane101
Understood, however a couple points:

1\. He's based in a totally different country, I'm in Canada and he might as
well be based in Japan (an example but close enough).

2\. The chances of him discovering the app are slim.

3\. The chances of him finding out the I created the app are even slimmer, and
because the app isn't a direct competitor the chances of him looking up who
founded the company isn't likely.

I think based on those 3 points, my odds are good. But I truly appreciate the
dialog here because it got me thinking.

