NDA Agreement for Software Development

What is a software NDA agreement?

A software NDA agreement, or simply non-disclosure agreement, is a legal document used to protect confidential information shared between parties during the development of software.

An NDA agreement for software development protects sensitive information related to the development of mobile applications, websites, online SaaS platforms, gaming or AI software, and many more.

A software NDA agreement sets up a clear legal framework for protection of confidential information and includes the key elements below:

• details of the parties who sign the contract;
• detailed description of a software;
• duration of the agreement itself;
• list of cases for permitted disclosure;
• scope of confidential information.

The main purpose of the agreement is to prevent unauthorized disclosure of confidential information. Depending on the type of contract, confidential information may have various forms. For instance, it could be a source code, business logic, user data, graphics, technical documentation, etc.

An NDA agreement could be of two main types:

• one-way disclosure. This is when only one party shares sensitive information with the other party. In its turn the other party maintains an obligation of confidentiality. This is the most popular type of software NDA agreement.
• two-way disclosure. In that case both parties disclose and get access to the other party’s confidential information.

The parties to an NDA agreement for software development are the disclosing party and the receiving party. The disclosing party is usually a start-up, software company, or business that hires a software developer to create and develop certain software. The receiving party is software developers, contractors, or technical specialists who are engaged in software development and, as a result, get access to a client’s confidential data.

How to create a software NDA agreement?

Drafting a solid Non disclosure agreement for software development from scratch could be a challenging task even for a lawyer. To become a legally binding document, an NDA should include certain mandatory elements.

Below you can find the breakdown of the most essential clauses every software NDA agreement shall have:

Details About the Parties

Identities of both disclosing and receiving parties should be defined directly in the text of the agreement. This information includes full names, addresses, and contact information.

Making a mistake here can lead to serious legal consequences. Imagine not being able to sue a person that discloses your confidential information simply because you did not identify that person correctly in the text of the initial software NDA agreement.

Definition of confidential information

Every company, business, or start-up has huge arrays of sensitive data, confidential information, and trade secrets that have to be protected. However, it does not mean that the receiving party shall maintain a non-disclosure obligation for all that information.

A good template of an NDA agreement should define the exact scope of information to which a receiving party has access and that should be protected. The best way to do that is to “connect” confidential information to the description of a software project on which the client and the software developer work together.

There is one more essential legal tip to keep in mind. A software development NDA template cannot protect data that is already known to the public or could be accessible through the Internet or other open resources. Therefore, a software NDA cannot protect the following:

• widely used programming practices, codes, or algorithms; or
• practices, codes, and algorithms that are independently developed by the receiving party, which can be sufficiently demonstrated by the receiving party.

Duration of NDA

An NDA agreement for software development cannot last forever. The duration should be limited in time.

As a golden rule, a receiving party undertakes to not disclose confidential information during the whole period of a software’s development. On top of that, the parties to the NDA can also establish a non-disclosure obligation for some period of time after the software development is finished.

There is no defined period of time in federal or state laws for which an NDA agreement can last. However, the average duration for a contract is between 6 months and 3 years.

Disclosure to third parties

In the course of cooperation, the receiving party may need to disclose information to their subcontractors, employees, and consultants. Therefore, such a disclosure is considered permitted and cannot be recognized as a violation of the provisions of the NDA.

A confidentiality agreement software development shall also permit disclosure of confidential information in either of the following cases:

by virtue of a court order or ruling; or

based on a lawful request from federal or state authorities.

In case of disclosure, a receiving party undertakes to immediately notify the owner of confidential information about such a disclosure.

Signatures

Either party should sign a confidentiality agreement software development. Without its signing, a template cannot become a legally binding contract. Parties may put their signatures by hand or using online e-signature tools.

When putting their signatures, parties should also indicate a date on which the signing takes place.

How to customize a software NDA agreement at FasterDraft?

In order to customize a document’s template, follow a few easy steps below:

1. Click the button “Create Document.”
2. Answer simple questions.
3. Select a document’s format—NDA agreement software PDF or Word.
4. Make a payment.
5. Download a customized document.