What is an NDA? (Protect Your Secrets Simply)
“Can you keep a secret?” usually isn’t enough in business. You need a Non-Disclosure Agreement (NDA). It is the legal equivalent of the first rule of Fight Club: You do not talk about what you see here.
One-Way vs. Mutual (Know the Difference)
Not all NDAs are the same. Are you the only one sharing secrets, or are you swapping secrets?
| Type | Who keeps secrets? | When to use? |
|---|---|---|
| One-Way (Unilateral) | Only Receiver | Hiring Employees |
| Mutual (Two-Way) | Both Parties | Partnerships |
Mutual: Two companies discuss a merger. Both show their financial books. Both sign a Mutual NDA.
“I will sue you” is harder than it looks
An NDA gives you the right to sue, but it doesn’t magically stop leaks.
1. Injunction (Stop It!)
If you catch them leaking, you run to court for an “Injunction.” This is a court order forcing them to shut up immediately.
2. Damages (Pay Me!)
You have to prove that the leak cost you money.
(Hard Part: “Because they told my competitor, I lost $50,000.” You have to prove that exact number).
3. Legal Fees
Crucial Clause: Always include a line saying: “The loser pays the winner’s legal fees.” Without this, suing them might cost more than the secret was worth.
Pro Tip: The “Residuals” Clause Trap
If you are a freelancer or developer, watch out for this sneaky line.
“Unaided Memory”
Translation: If they look at your code, memorize the logic, and rewrite it later from memory, they owe you nothing.
Advice: Strike this clause out before signing.