November 18, 2018

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

NDA vs Confidentiality Deed - which one?

NDA vs Confidentiality Deed – which one works best?

Updated: 8 December 2019

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

But they aren’t the same. 

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

An NDA will work best 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 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 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? Be sure to leave them below. 

I wish you success in your ventures!

About the author 

Vivian Michael

As founder and lawyer at Michael Law Group, CPA and owner of a business consultancy, Vivian is well-positioned to advise Australia's top entrepreneurs. Entrepreneurs benefit from Vivian's commercially focussed legal advice, business experience, and commitment to deliver the best quality business legal services to entrepreneurs.

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