Nail down confidentiality, non-disclosure, and non-competes

As a freelancer, it's important to understand the implications of signing a contract with a client that includes confidentiality, non-disclosure, or non-compete provisions. Depending on the nature of the project, a client may require that you sign a non-disclosure agreement or a non-compete agreement. Use your workbook to write your own definitions of these terms as you read about them. 

Key terms

• Confidentiality provisions

• Non-disclosure agreement (NDA)

• Non-compete agreement (NCA)

What’s confidentiality? 

A contract with confidentiality provisions requires one party to keep certain information confidential and not disclose it to third parties. Confidentiality provisions may also require you to return or destroy all copies of the confidential information upon completion of the project. If any party to a contract breaches the duty of confidentiality, they may be held liable for damages.

Two types of agreements typically used to protect confidential information include non-disclosure agreements and non-compete agreements. 

What’s a non-disclosure agreement (NDA)?

A non-disclosure agreement (NDA) is a contract used when dealing with sensitive information. NDAs are often used when business plans, marketing research, trade secrets, or new processes are involved. 

Consequences of breaking an NDA

Breaking an NDA can have serious consequences, including legal action and damages. If you do sign an NDA, make sure you keep the requested information confidential and be careful not to share the information with anyone who’s not covered by the NDA.

What’s a non-compete agreement?

A non-compete agreement (NCA) prohibits you from working in a similar role for a competitor. Non-competes are typically used to protect a business's competitive advantage, protect them from losing valuable employees to competitors, and protect confidential information. If you're asked to sign a non-compete agreement, be aware that these agreements can have a negative impact on your ability to work in your field. 

Non-compete agreements can limit your ability to find new work, so you should make sure you understand the terms of the contract before agreeing to it. In some cases, you may want to negotiate the terms of the contract in order to protect your own interests.