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, Vivian advises Australia's top entrepreneurs on business and employment matters. Clients benefit from Vivian's commercially focussed and pragmatic legal advice, business experience, and commitment to deliver the best quality business legal services to her clients.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

Sign up to our mailing list for useful resources and updates 🗞️