NDA vs Confidentiality Deed – which one works best for your startup?

By Vivian Michael | Startup Contracts

NDA vs Confidentiality Deed - which one works best for your startup?

NDA vs Confidentiality Deed - which one?

You’ve likely heard more about NDA’s than confidentiality deeds.

They aren’t the same. 

And in a nutshell, here’s how to know which works best for your startup.

An NDA will work best for your startup if:

  • You need to e-sign (if your recipient is somewhere else)
  • A payment is involved (i.e. you are paying the recipient or the recipient is paying you)
  • You accept that you will have 6 years to pursue a breach (whereas a deed allows you more time to handle a breach).

Unlike an NDA, with a confidentiality deed, you will have a longer time period to enforce the deed for a breach.

So, a confidentiality deed will be best for your startup if:

  • There is no money involved yet (e.g. you are in the initial stages of discussing an idea with a prospective business partner or consultant)
  • You need more than 6 years to enforce the deed for a breach (you will have 12 years in QLD, NSW, ACT, NT or TAS and 15 years in VIC and SA).
  • You and the recipient can sign a paper copy of the deed by pen.

Also, here are some extra requirements for the confidentiality deed:

  • Use the words ‘executed as a deed’; and
  • Be signed by 2 directors or a directors and a company secretary - a requirement from s. 127 of the Corporations Act 2001 (Cth).

Do you need help from an Australian business lawyer for startups? Contact us today for help on info@michaellawgroup.com.au or 1300 478 278 Australia wide or on +61 2 9151 7233 from overseas. We are always glad to help.

About the Author

Vivian Michael is a lawyer and founder of Michael Law Group. Vivian's mission is to make quality business legal services accessible to startups that would otherwise DIY, rely on legacy contracts or go without.