NDA, which stands for Non-Disclosure Agreement, is a document that can be often found among software outsourcing routine. Though it has become a common thing for both startups and huge projects, only few business owners truly understand all its pros and cons of NDA. If you are not one of them, welcome inside.

NDA – fashion or must-have?

Indeed, today signing NDA has become some sort of fashion. Plenty projects ask to sign up everyone who is involved, no matter whether it is worth it not. Today it is used not only within company-owner, but also with the outsourcing contractors.

Creating NDA is also a hard work, requiring lawyer to be involved at least for the first time, which definitely involves some fund to be spent. Like any other thing in the world, NDA also has it pros and cons. On the one hand NDA can protect you from plenty troubles, but on the other one limit public coverage.

To make the situation more clear we have gathered all the main pros and cons and are ready to discuss them now.


Advantages of Signing NDA

Luckily, signing NDA has more advantages than disadvantages. Probably this is the reason why everyone is so keen to add it the documentation pack. Here come the most common of them.

1. Company Image Protected

One of the main reasons why NDA is signed is image. There are plenty companies that are reluctant to admit to their customers and stakeholders that they had to use somebody’s help in creating a product. Indeed, almost any big company you know outsources these or those services, but only few of those are ready to speak about it in public.

Besides, if there will be any negative publicity associated with your contractor, it would never influence your image, since your cooperation will never go public.

On the other hand if your business is not connected with software development, there is nothing for you to worry about in any of these cases.

2. Personal Data Security

One more good reason to sign an NDA is to provide total security for the data you provide to the contractor. Though majority of outsourcers would have never used it anyway, in case the data are extremely important for your business, e.g. price strategy, financial reports, it is better to go and protect yourself and sleep tight.

3. Technical Security

Not so explicit advantage of nobody knowing who developed your product for you is technical security. It is quite evident that the same developer uses common approach to all products he develops. I.e. if one of those will be hacked, IT-criminals might find the way to hack all products developed by that developer.

But if you signed an NDA, they will never know about you and your little product.

4. Idea Stealth Protection

This point is majorly referred to startups, especially at the stage when the idea is yet to be developed. You know how costly fresh ideas are today. So to make sure your vision of a product is not stolen, it is better to ask anybody involved to keep their mouth shut at least until the release. And NDA suits for that like nothing else.

Disadvantages of Signing NDA

Though at the moment NDA seems to you like a magic shield, ready to protect you from all troubles in the world, there’s also another side of the medal. Let’s what the negative impact can be.

1. No Portfolio Highlight

Basically, when you don’t let your contractor to tell that he has developed the product, you deprive yourself from free publicity, you project might be longing for. When the Contractor will be telling in its blog, portfolio, conferences and tutorials about the tricks and technologies he used, your name will never pop-up. This means that you will be missing a huge auditory and free promotion.

2. No Public Credit for Conductor

And finally, signing an NDA means that the Contractor will never receive the public credit he deserves. Sure, this the question of karma, not business, but we recommend you consider whether you really need the NDA before requesting to sign it.


As you see there are positive and negative sides here. Hope now, you will have a bigger picture on what NDA brings in.

P.S. Download a free NDA template using this link

Rubyroid Labs is a custom web development company. Learn more about our services.

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Daria Stolyar is a Marketing Manager at Rubyroid Labs. You can follow her at Linkedin.

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