A $65million payout.


That’s what the Winklevoss twins got from Facebook as compensation for Mark Zuckerberg “stealing” their idea.


We don’t know if he actually stole the idea or not, but what we do know is there was NO NDA (

Non-disclosure agreement).


If there was nothing to prove that there was indeed a discussion how did they have a case in the first place? They had text messages!


But why leave things to chance?


Asides from the obvious lesson of making sure you have an NDA signed, there’s one other lesson to be learnt.


Make sure you have an enforcement procedure in place.


What happens when one party flouts the provisions of the NDA?


We have extensively covered the Non Disclosure Agreements, but there’s one more area we’ve left in the dark: What are the pitfalls you need to avoid? And how do you make your NDA airtight.


  1.  Lack of enforcement procedure


Yes, neither party must reveal the content of the NDA. Yes it will be a breach of trust, Yes it will portray bad will.


So they better not flout the rules of the NDA or what?


That’s right, but  what happens afterwards? What do you do? Does the case go to court? Are there financial consequences?

Clearly outlining the results of a breach of the NDA will help you as:


  • It increases the likelihood that the other party will adhere to the terms
  • It helps your lawyers act quickly as there’s an already outlined course of action.


  1. Not keeping an electronic copy of the SIGNED NDA


In 2018, this sounds like something you do without thinking but you never can tell.

How hard is it to imagine an NDA “walking away” or disappearing during litigation?


Leaving the theatrics aside, it happens more often than you would imagine. The hard copy is nowhere to be seen and no one can seem to have an e-copy with all the complete signatures.


What should you do: Ensure that the NDA is properly signed by the parties and keep multiple copies of the NDA where they can be easily found in case of a problem.


  1. Leaving our exceptions


To be honest, your NDA can’t just be blanket “DO NOT DISCLOSE”, There has to be exceptions . Believe it or not, the other party can get a “get out of jail free” card on the grounds that the NDA was difficult to adhere to.


If you ever go to court, it increases the chances that it will actually hold up.


Exceptions might include information that is already public knowledge, information that was received by a third party and information that the signer developed him or herself.


  1. Failure to define confidential information


One day bushmeat will catch the hunter…


Recognize the phrase? “Confidential information”is usually used as a catch them all, but without a clear definition of what is actually confidential, it makes the NDA a bit difficult to enforce.


Your contract must state in clear terms what constitutes confidential information and also clearly state that the piece of information cannot be shared verbally or in writing.


  1. Leaving room for clerical errors


We’ll give you an example:


Mr Bayo works for Super Man enterprises.


Super Man enterprises is about to enter into  a contract with Big Boy Ltd.


They send Mr Bayo over as their representative. Big Boy Ltd drafted the NDA with Mr Bayo’s name on the agreement. There was no mention of Super Man enterprises.


If Super Man enterprises wants, they can leak the content of the NDA. Afterall, they have not entered into any agreement as their name does not appear on the NDA.


Errors like this can render your NDA invalid so it’s important to get all the information correct.


Spelling errors, or leaving out  “Ltd.” could also invalidate your NDA. So check and double check!


  1. Signing a fake mutual NDA


A mutual NDA is supposed to protect both parties involved in the contract.


But in cases where you are not careful, you might actually be signing a one-way NDA.  Don’t pay attention to the “Mutual Non-Disclosure Agreement”title but make sure you focus on the content of the contract.


Specifically, focus on the following:

  • The term “confidential information” should cover the information of both parties. Make sure that your informations contains everything you want to protect.
  • Clearly state each parties obligations
  • Each party should have the right to protect themselves in case of a breach of contract


Running a business is hard – as already established. But there are steps you can take to make things easier for yourself.

So if you receive an NDA that does not sit well with you, it could be one of two scenarios. One, a big and sophisticated company trying to intentionally get you in a pitfall OR two, a business who doesn’t know better and is just using a template.

Whichever way it goes, you can solve the problem by sending an NDA of your own. Get one here