So, when is an NDA needed? Whether you are selling a business or writing an employment contract, there are certain situations in which you may need an NDA.
In this video, senior solicitor Isobell Willoughby discusses non-disclosure agreements. She explains when you should get an investor to sign an NDA and when you may want to avoid this. Take a look below for more information.
When Is an NDA Needed? Transcript:
Thinking of sharing a business idea? Lining up a meeting with a potential investor? First question: should you get an NDA?
Well, maybe, but not always.
I once acted for a very cautious client, a lovely person, but a big fan of legal paperwork. Their view, every conversation, no matter how small, needed an NDA. Coffee with a potential investor? NDA. Quick Zoom with an adviser? NDA.
The problem was that the level of caution was actually putting people off. Investors aren’t generally keen on signing legal documents before they’ve even had a chance to hear the pitch. It can come across as overly formal and even untrustworthy, and that’s not a great way to kick off a relationship.
It’s also worth bearing in mind that not all NDAs are created equal. If they’re too broad or too aggressive, there’s a real risk they might be found unenforceable. The best NDAs are focused, fair, and used only where they genuinely add value, like when you’re sharing sensitive, confidential information.
For more general discussions, though, reaching for an NDA can sometimes feel a bit like using a sledgehammer to crack a nut. So, yes, NDAs can be a powerful tool, but like all tools, they’re most effective when used wisely. If in doubt, get advice before pushing one across the table.
Do I Need a Lawyer for an NDA?
Whether you should get an investor to sign an NDA or not really depends on your specific circumstances. However, we always recommend seeking a lawyer’s help if you’re unsure.
If you’re wondering if you need an NDA, talk to our team, and we’ll be more than happy to review and explain your options, as well as draft your contracts accordingly.
Additionally, we can assist in other areas of the commercial field should you require it, from litigation to employment law.