Categories: Mobile App Development

Why Do You Need Sign an NDA for Mobile App Development?

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In business, the lack of trust can cause you a heavy loss. Your co-founder may sell your software code or colleague of yours may steal your business secrets. That is why we have a non-disclosure agreement.

What is a non-disclosure agreement?

NDA stands for a non- disclosure agreement. A non-disclosure agreement is an agreement between the parties where both of them promise not to disclose any sensitive or confidential information. It is typically signed by the business owners or by the employer with the employee, vendor, supplier or anybody who may have access to sensitive or important information. If anyone of the party discloses the confidential information with someone else then action should be taken and the agreement between the parties should be canceled.

Elaboration about who needs an NDA?

Let me give you two examples.

Example 1:  You have a software business which is hiring a software consulting company to help you related to some amount of code which you are building. Here you will sign an NDA with an app development company to prevent them from misusing the code which they are writing for you.

Example 2: You are a professional service, which is engaging certain vendors to help you with delivering the services to your customers. They may learn about the policies and criteria of your business and share it unlawfully with the third party. Here again, an NDA will prevent them from doing that. It is important to note that an NDA is fully enforceable in a court of law.

What is excluded in an NDA?

Any information which is publicly available is excluded in an NDA.

What all can I include in an NDA?

You can include anything you wish which you believe gives you a competitive advantage or which might give you a competitor an unlawful advantage. If they gain access to it there is no specific format for an NDA. But typically company includes business secret, business strategy, diagram, documents, and tradecraft or trade secrets or even the source code. The software, which they are building for their website or mobile application.

Is it valid if not printed on a STAMP PAPER?

This agreement is actually valid even if it is not printed on a stamp paper. It is sufficient if it is printed on a letter pad or official documentation of your company.

How long will the process take?

Typically, because of the efforts and customization involved. The development process of NDA takes maximum 3 business days to prepare a non-disclosure agreement. If this is the highly prioritized requirement for you then you can do it in 1 business day on the priority and a humble request from a legal company.

Involvement of NDA in the mobile app development process:

Securing intellectual property is a common method in the software field.  However, the case of mobile app development is somewhat different.  Here app idea is more indispensable than source code. Whenever you may talk about the idea of an app, then everyone will ask about NDA first.

In the vision of some mobile app developers, the NDA exists as pointless in some cases because they have a rough sketch of app idea and its imagination in mind. They don’t have any wireframes, business plan, investors, design or anything else about the app. The idea is comprised of 2-3 sentences.

What does an NDA cannot accomplish?

The purpose of NDA is to protect the app idea. Although, it does not secure the idea by stealing from others. It only secures the known parties in the document from keeping confidential information concealed from others.

If a third party approaches a mobile app development company to build an app on a similar idea then they can do so. But the condition is that they must not use any confidential information from the respective NDA.

When you should avoid an NDA?

If you are opting one side NDA, then this could be cautious. To overcome this issue, You can opt for the mutual NDA where both parties are recipients as well as disclosure of confidential information.

Moreover, you must look over the time limit of NDA. As a mobile industry with rapid pace and speed, then NDA should not be more than 2 years.

When can you sign an NDA?

Legal advice states, if the involvement of your business in app development is with a well-established company, any comparable organization, a reputed brand or a startup that is ready for funding then you can sign an NDA without any caution. Moreover, the NDA must be a mutual NDA where terms should have any wrong provision. 

Can NDA behave as an obstacle for app development?

Everyone thinks about the protection of their idea of stealing. However, excessive secrecy may turn into the result as an obstacle for app development and can slow the speed of app development.

Here I will tell you some situations when signing a non-disclosure agreement can affect you in a negative way.

  1. Fundraising Stage: Exposing the idea to sponsors is necessary for fundraising. But it is also a point of risk. Furthermore, it is too hard to convince sponsors to invest before signing an NDA. The mutual discussion is the best way for the project building and usage of technology, but at the same instance, do not show the main properties of the app. 
  1. Stage of developer hiring: While hiring the discussion over the idea of work and scope is common to process. It is quite hard without disclosing any information about the idea of the app. Clients can discuss prospective problem and technology faced in the development of the previous project. This is before the app developer can initiate work on the project.

Conclusion:

The coin has two sides. Similarly, Non-disclosure agreement also contains advantages and disadvantages. The appropriate use of NDA is useful. However, too much secrecy can lead to a ridiculous point over signing a non-disclosure agreement. But if you are following the above information properly then you could find whether you need NDA for your project or not.

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