Do you sign NDA’s with clients?

I am an entrepreneur who has built my own startups and plan to make more in future. But I am about to take on some freelance consultancy work for other startups and I need to be prepared for when I’m asked to sign an NDA.

My view is that there is a danger it will preclude me from working for other clients in the same sector or with similar ideas, or from setting up something similar myself in future.

Of course I treat everything I do in a freelance role confidentially and so some kind of confidentiality agreement makes sense. But NDA documents are very restrictive and have the chance to stop you ever thinking about a particular idea again.

What do other entrepreneur/freelancers do in these situations?

  1. 2

    A lot of freelancers get defensive when it comes to a client asking them to sign an NDA. Instead, I've always approached it as an opportunity to help provide a solution. I reply with something like:

    Sure, I'd be happy to sign your NDA. However, due to the increased legal liability, I do require a $500 non-refundable NDA fee be paid first. To where should I send the invoice?

    [Optional] Also, note that my business depends on me being able to demonstrate the quality of my work and the price I quoted reflects that. If you’d prefer for this project to be NDA’d and not in my portfolio, I can re-quote the project for you.

    I've found signing an NDA adds real costs to my business. Increased liability, added legal fees, and more. So I don’t shy away from that… I run my freelance business like a real business and charge for these added costs.

    I've found clients are usually receptive. And I have similar templates for all kinds of situations, including finding new clients.

  2. 2

    I have made sure that the NDA don't restrict me on technology the last time I signed one. For example I build a web-scraping tool for a company that are using this tool to sell to multiple clients. The first draft of the NDA said things like "Can not build web-scraping tools" which restricted me on technology.

    Instead I had something like "Can not compete by building a web-scraping tool that is used for XYZ" or something like that. Now it was that I can't compete straight on with their product which kind of make sense.

    Not sure if this was helpful or not.

    1. 1

      very useful, thank you.

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