Competition · Legal

I broke a NDA. What could happen?

Anonymous

September 22nd, 2017

I'm a independent consultant and signed a NDA with a stealth mode startup that's considering hiring me for a contract assignment. I mentioned sharing some basic details about the startup to a contact, and the startup informed me that said contact is an investor of a direct competitor. How much trouble could I be in?

K. Robbins Head Moose at Moose WorldWide Digital

September 22nd, 2017

It all depends on how much money the stealth mode startup has, and how they feel about it. I don't know what state you are in, but suing someone is not cheap, takes a very long time, and only the lawyers win.


People who are naive, and have never been in an actual legal battle threaten to sue.


That being said you probably won't get the job, as you have violated their trust.

David M

September 22nd, 2017

If this is a real scenario, it is very unwise to discuss in an open forum that can be traced back to you and illustrate your continued discussion of a confidential matter.

vino cherian CTO | CFO Needed.

September 22nd, 2017

I agree with K. Robbins.

Michael Trup Experienced entrepreneur, management consultant and strategy advisor.

September 23rd, 2017

In theory, you can be sued for damages. Proving breach of an NDA and actual damage is almost impossible in the UK where we do not have punitive damages. In the US it's easier with a lower burden of proof. I guess they would have to prove some damage and negligence but I am not an attorney. In practical terms, going legal is expensive and uncertain. If you don't have a lot of assets and damage isn't clear you will probably be fine.

Barry Burr founder, Barry Beams llc, a startup to re-light your night.

September 23rd, 2017

Does the NDA have a clause requiring disclosure if you commit a breech whether it was knowingly or unknowingly when you committed the breech? A comprehensive NDA will have a clause covering what to do in the event of a breech. Now that you know you committed a breech, you need to comply with any and all provisions the NDA covering it, or the knowing failure to disclose the breech could get you in much more trouble than having made an unknowing breech which you didn't know you were committing at the time.

OHENEANTWIB Don't Live the Legacy of others but rather Live your own Legacy,

October 13th, 2017

Huh! What you did is wrong, but I am sure do did not had bad intension when you share the information. But you will have to convince the start up you had not intension of doing so and it does to a conversion you had with the person that is why you did what did and that you thought that the person will have given you some advice.

Barry Burr founder, Barry Beams llc, a startup to re-light your night.

October 13th, 2017

Reading some of the later comments, I would like to add that in these kind of situations, its one strike and you're out. You need to distance yourself from any sense of fraud before it taints you against any prospective future investors giving you credibility.

Joseph Wang Chief Science Officer at Bitquant Research Laboratories

September 23rd, 2017

If all you shared was basic information then probably nothing. If it's a standard NDA, then it's likely that the information you shared would not be confidential, and if there is any legal action against you, they can only recover the amount that you damaged the company, which is likely to be negligible in this situation.