The next time a company wants you to sign an NDA, think twice before you jump on.

An NDA stands for “Non-Disclosure Agreement” which wikipedia defines as: “is a legal contract between at least two parties that outlines confidential materials or knowledge the parties wish to share with one another for certain purposes, but wish to restrict from generalized use.”

Typically a company will want this signed with key clients, distributors, partners, etc…so they can protect anything they share during business.

From your own perspective, an NDA can be great, it helps protect (legally) anything you tell someone. However, the reverse side, if you sign a MUTUAL NDA, that means you too, could be liable for what you learn about the other company.

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I get opportunities or requests almost weekly from others who we talk business with to sign an NDA. The “old me” would just sign them so the conversation could move on, however, not the “new me.” What changed?

I realized that by blindly signing NDAs with companies who are in my industry (but who’s business I don’t completely understand), I may be creating serious liability for my company. Simple situation…

What if that company happens to be working on something that you’re working on?

Sure, an NDA is not the same thing as a “Non-compete” - but if 2 months later, you too launch the “same” service, what’s going to stop that company from suing you anyways saying that you used privileged information post NDA to “steal” their ideas.

So my #1 reason for thinking twice about NDAs is that even if there is a small chance that our businesses will cross, I’m putting my company at serious liability (even if I don’t really “steal” anything and was working on it all along). Next time someone wants an NDA, just be sure you are not going to enter their space.

And, as a good sales person, try to learn the MOST you can without the NDA. Using this, just in the last month, I’ve refused to sign two different NDAs and in retrospect, I’m very glad that I did.

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