Domain Leasing, Joint Venture or Co-Development
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PostPosted: Sun Mar 24, 2013 12:35 pm 

Joined: Tue Mar 05, 2013 10:58 am
Posts: 33
Hi All,

Just a quick post here to try and instill in everybody the importance of 'Non-Disclosure Non-Use Agreements' - and it is perhaps the most important document you have to consider both in a leasing and joint venture agreements, and I mean for both sides.

Now it is well known that big Venture Capitalists and some huge internet companies do not sign NDA's. Of course they come out with all kinds of ridiculous arguments, "we see too many ideas and they may overlap" or "we are just too big to be held to ransom by somebody who thinks they showed us an idea when we were working on it already" are two of the usual spouted arguments, both of which are of course complete rubbish. What they are really saying is that they may see something that they could develop elsewhere or with someone else and not credit you for it.

Now why is it so important then to have an NDA?

The simple answer is that it protects both sides in the agreement, or at least a 'mutually binding NDA' does, and both sides do unfortunately need protecting. Imagine the scenario whereby I have an idea for a development and approach a developer and I tell them what the idea is. The developer could just go away and develop the idea themselves or if they could try getting someone else to develop it for them (trying to create a smoke screen). If you do not have an NDA then you have told them your idea with no protection. BANG GOES YOUR UNIQUE DEVELOPMENT IDEA!

Now as the developer in the above scenario you are approached by someone to develop a unique way of solving a problem, yes you would get paid for it (presumably), but just suppose that you develop the coding and show that it can work and the person goes on to sell your idea to another party? Guess what, those possibly hundreds of hours you spent developing the coding are now found on websites right tthroughout the internet, the seller makes all the money and you have a few dollars for developing it (if you are lucky that is and they paid you).

With a 'mutual non-disclosure non-usage agreement' it protects both sides, that means that should the unthinkable happen the other party has recourse to enforce the contract through the courts. But besides this it also means that work can progress freely without either side having to think that they have to hold anything back, this will allow the work to progress at a much faster pace and all contingencies to be openly discussed between the parties making the result hopefully be more succesfull.

One other point of course is make sure that you make the legal jurisdiction your home jurisdiction (mine is England, in the United Kingdom of Great Britain and Northern Ireland): Yours may be a State in the USA, a province, or just a country, but the thing is make sure it is local to you. Again I would doubt anyone who would question the jurisdiction if their national legal system was generally respected, so that does rule out a few certain legal jurisdictions! :o

One thing not to do is get upset by being asked to sign a mutual NDA, this is common business practise, indeed I would be suspicious of anyone who would not sign one. As I said at the beginning I like doing things with a handshake, but unfortunately not everybody sees that as a binding contract. There are many NDA contracts available on the web, I would suggest that you look through a few and see if you can find one that suits you, if you do then download it and save it, for tomorrow you may well need it, unless of course you like playing Russian roulette, for that is what you will be doing without an NDA, for you will be let down sooner or later if you do not.

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