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 have any questions about NDA's or a confidentiality deed?





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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 entrepreneurs launching in Australia that would otherwise DIY, rely on legacy contracts or go without.

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