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A friend of mine (let's call him Joe) is working on a promising project, and has asked me for help. As a matter of friendship I agreed (orally) not to discuss the details, but now he has a potential investor who wants me to sign a non-disclosure agreement (NDA). Since thus far all my work has been pro bono I told Joe I am not comfortable putting myself under documented legal obligation without some kind of compensation for the risk. (It needn't be strictly financial. I would accept a small ownership stake or possibly even just guaranteed credits in the code and documentation.)

Is my request reasonable, or am I just introducing unnecessary complexity?

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    In my universe an NDA is just written confirmation of what I would do anyway: keep things secret that are supposed to be secret. I don't see it as taking on a financial risk. However, if you see things moving from "favour to a friend" territory into "contracts and lawyers" territory, then it might be appropriate to asked to be paid. Not to compensate for the risk of signing an NDA, but to compensate you for the work you're doing.
    – Kate Gregory
    Dec 9, 2012 at 0:06
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    you can reasonably refuse anything, is it reasonable for you to expect them to accept your refusal, that is another issue. Also this isn't programmer specific in any way.
    – user7519
    Dec 9, 2012 at 0:56
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    The standard advice would seem to apply in this case. "Consult an attorney before you do ANYTHING that could come back to bite you."
    – John R. Strohm
    Dec 9, 2012 at 11:34
  • For more discussion about the appropriateness of this question to P.SE, please see this meta question.
    – kojiro
    Dec 10, 2012 at 19:28
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    As a consultant, it's just basic professionalism to not discuss your clients work with others. However, if you're working for free, I consider it 'unreasonable' for anybody to require you to sign anything. I would look for another pro bono project where your efforts are appreciated a little more. (my 2 cents)
    – John MacIntyre
    Dec 10, 2012 at 19:45

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This was 2 friends working on a project together. This is now 3 entities doing business together. So get to business. Your work may have been pro-bono, but there's money involved now.

Talk to your friend about what his intentions are for you, with respect to the future of the project, while he still has a majority say in the matter. He may have every good intention, and still forget to consider you while he's caught up in the excitement of making his business deal, between his company and his investor(s).

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  • This is the best advice yet. It is now a business deal. The author's role should be clearly defined.
    – Ramhound
    Dec 11, 2012 at 13:33
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Get paid or Open Source the code

Any time a 'business interest' decides to establish legal restrictions I would absolutely make them pay for that privilege. A NDA is basically a gag order that prevents you from sharing internal information pertaining to their company/project. Basically, if you talk about information private to their company they have the right to sue.

It's insurance for them but if they decide to lock the code you wrote into a proprietary licensing scheme there's nothing you can do about it as talking about the internal details would be violating the NDA.

If you don't already have the code covered under a license, you could try to release it under a permissive license (ex MIT) that will guarantee your right to continue using the code you wrote in the future.

The only problem with retroactively applying a license to existing code is, every contributor needs to agree to the license terms as their individual contributions have an implicit copyright to the developer who wrote them.

Worst Case (they win, you lose):

Your friend jumps onboard, they use your code, and lock it down under a proprietary licensing scheme.

They can legally prevent you from using the code you wrote on future projects, unless you lawyer up and come up with sufficient proof that they are using your code without permission (ie violating your personal copyright).

Either way, if they go with a proprietary licensing scheme you should be compensated for your efforts.

Good Case (they lose, you win):

You setup terms for compensation for the code. Basically, they purchase rights to use the code you wrote without restrictions. At that point a NDA doesn't matter because you lose rights to build on the code anyway. Just don't share any of their internal information publicly or you put yourself at risk of being sued.

Best Case (win, win):

You release the project under a MIT license so anything written up until now is free for everybody to use and build on (including for commercial purposes). It guarantees that you can still build onto the code in the future regardless of what they use it for. A NDA still doesn't matter as long as you respect the terms. If they want to go in a proprietary direction, they're welcome to fork the main codebase.

There's a good chance that they're just trying to protect their interests. There's nothing wrong with that but be careful not to give them the legal right to screw you in the future if they choose to go down a path you don't agree with.

Even software that you write pro bono still isn't free until you setup a license that guarantees future usage. Sweat equity (ie effort) is always holds value and as long as it can be used to generate profits, there will always be somebody looking to gain ownership over the rights to use.

Some terms may depend on where your live too. Intellectual property rights are a messy business.

Disclaimer: IANAL (I Am Not A Lawyer).

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    I think (I'm also not a lawyer) this answer is mixing up the transfer of copyright ownership with non-disclosure. Granted, an NDA may have restriction implications on the authors ability to use his owned code afterwards though. I believe the coder owns the work unless he signs something that says 'work for hire'.
    – John MacIntyre
    Dec 10, 2012 at 19:58
  • You clearly are not a lawyer or have any professional friends. Because if somebody came to me and did ANY of the things you mention would no longer be my friend nor have anything to do with my project.
    – Ramhound
    Dec 11, 2012 at 13:29
  • @Ramhound If ad-hominem attacks make you feel better, you're entitled to your own opinion. I love software development because it's one of the purest examples of a meritocracy that I have encountered to date. With that said, I have also seen how ugly a lawsuit can get when business agreements were made based on loosely defined written contracts. When lawyers and legal documents are introduced it's not a bad idea to consider the worst case scenario.
    – Evan Plaice
    Dec 11, 2012 at 20:46
  • (cont) Believe me, I always prefer a gentleman's agreement over legal. Unfortunately, some people have a hidden price tag on their moral foundations. In the OP's particular case, signing a NDA means that he has everything to lose and nothing to gain. In business terms, those are bad bargaining chips. Some people don't have the stomach for business side of things but that's how the game is played.
    – Evan Plaice
    Dec 11, 2012 at 21:09
  • @EvanPlaice - I think the author should walk way also but for different reasons. If somebody attempted to gain control over the rights of software they only helped write, unilateraly thats crossing a professioal line for me. If somebody does something for free, then in my eyes, they don't have the right to change license on the code you only helped with later on. I would apply the same rules to myself, which is the reason, i don't do stuff for free and expect to be compensated when the person I am helping makes money (after all its unlikely my idea got it sold) or my leg work that got it sold.
    – Ramhound
    Dec 12, 2012 at 12:17
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Recap: Your friend brought you in, and, as a friend, asked you not to talk about the project. You agreed. Your friend is now talking to an investor, which means that there are potentially Big Bucks involved. The investor wants to bind and gag you, legally.

There is a basic concept in contract law known as "quid pro quo". In everyday language, this may be translated as "What's in it for me?" Whenever you are asked to sign some piece of legal paper, if the answer to that question is not BOTH immediately apparent AND to your basic liking, DON'T SIGN IT!

In this case, your "consideration" under the NDA, meaning "what's in it for you", does not appear to be well-defined. As such, your reply to their request is eminently reasonable.

In the future, the easy out is "My attorney has strongly advised that I never sign anything without running it past him first, and he's never given me bad advice. Let me go over this with him (or her) and get back to you." Then watch their reaction. If they have any problem at all with letting your attorney review their NDA, the old Monty Pyton line becomes applicable: "RUN AWAY! RUN AWAY!"

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  • So in other words if he doesn't want to sign the NDA ( after he actually has his lawyer review it ) he should simply walk away from the project.
    – Ramhound
    Dec 11, 2012 at 13:30
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    In a situation involving legal papers, everything is negotiable. If a mutually acceptable, mutually beneficial arrangement cannot be negotiated, then it is time to walk away.
    – John R. Strohm
    Dec 11, 2012 at 15:53
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Your never compelled to sign any sort of contract, and, if you do sign something when not of a sound mind, or under some sort of duress, then whatever you signed could (and should) be deemed as null and void.

Having said that, your request in my opinion is unreasonable. An NDA or NCNDA is about the most rudimentary piece of paper. You shouldn't be afraid of it, unless, of course you plan on disclosing information that the other party doesn't want you to disclose. At this point there is no guarantee of success in negotiation, only the terms and conditions prior to discussion.

If anything, since you aren't an employee, and not bound by the terms and conditions of an employment contact, its even MORE grounds for you to be requested to sign an NDA.

However, should your friend receive financial benefit as a clear result of your contribution, via the investor injecting funds, you should perhaps review things with your friend and steer things away from a 'Pro-Bono' type arrangement, in lieu of your professional services rendered.

ANAL - Am Not A Lawyer. ;-)

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  • Precisely - I would expect to sign an NDA before an interview. Since you aren't an employee/being paid - there is no control of any behavour on your part, your friend's other investors could reasonably expect your him/her to have put some sort of protection in place.
    – Martin Beckett
    Dec 9, 2012 at 3:52
  • To be sure, I'm not arguing or asking about whether the NDA request is appropriate (of course it is). I'm simply asking if I should keep working on this project for free after creating a legal obligation for myself.
    – kojiro
    Dec 10, 2012 at 19:38
  • Contract Law 101: For a contract to be binding, there generally must be an EXCHANGE of value, a "quid pro quo". I see the "quid" in this story: his silence. I don't see what he is being offered by the investor in return for his silence: the "quo". The answer is "No, you should not keep working on this project for free after creating a legal obligation for yourself, and you probably should not create the legal obligation for yourself in the first place unless they're going to pay you for it."
    – John R. Strohm
    Dec 10, 2012 at 20:48
  • Kojiro, that would depend on the reasons for being involved in the first place, how close a friend you are to Joe (the plumber), whether he has proposed some sort of light at the end of the tunnel, whether you simply enjoy it... All these things can only be answered by yourself. @Strohm, you are referring to a thing called "Consideration". One of the 7 elements of a contract. Consideration doesn't necessarily have to be "Fiscal".
    – ADP
    Dec 11, 2012 at 1:56
  • @kojiro - We cannot help you with making the decision to keep working on the project. It sounds like you want compensation if they want you to be legally bound not to discuss it.
    – Ramhound
    Dec 11, 2012 at 13:32

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