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?