Those who choose the entrepreneurial way of life quickly get used to terms and phrases like ‘Non-disclosure Agreement’ and ‘Service Level Agreement’. If you’re new to the field and you’re stymied by how easily people bandy about complicated-sounding phrases like these, don’t be! Take a breath and sit back and read through this article. Everything you need to know about these super-important concepts is right here, in front of you.
Let’s begin with Non-disclosure Agreements or NDAs as they are commonly referred to. In the most basic of terms, a NDA is a confidentiality agreement. It outlines what the parties in agreement can and cannot discuss with third parties.
Why Is It Important?
If you’re teaming up with someone for your business- whether it is a long-term partnership or a short-term project- and you want to keep certain things confidential, a NDA is a must. Whether you’re purchasing products or hiring services or using the expertise of another professional, a NDA will legally bind the parties towards maintaining the sanctity of confidential information, material and knowledge generated, shared and expressed during the course of the work. If any party violates the NDA, knowingly or unwittingly, there are legal ramifications of the same and hence, people are more likely to take their responsibility more seriously.
What Does A NDA Include?
The NDA will stipulate confidentiality boundaries, basically delineating information into public information and information that cannot be communicated to and discussed with anyone outside of the parties specified in the NDA. The NDA will put limits on the content/ product created and shared during the business alliance as well as disclosing information about the alliance itself- in case you want to keep it a secret.
Do You Need A NDA?
The NDA protects your proprietary claim over any information or content that is created or communicated when you’re working with someone. This is especially useful if you’re outsourcing some work or bringing in a non-employee/ freelancer to work on a project-basis for you and you would like to safeguard the integrity of any product, information or details pertaining to your business.
You need a NDA when you want to protect business secrets and insider information about your trade. You also need a NDA when you’re sending out information about your company for a project/ alliance that you don’t want anyone else to learn of. In short, whenever you want to limit the spread/ exchange of any kind of information or data regarding your business make sure you insist on a NDA.
Service Level Agreement
Next up are the Service Level Agreements or the SLAs. These are simply agreements between a client/ business (you) and the service provider you’ve hired. It is a contract between a customer and a service provider that sets service standards to be met in return for a service fee.
Why Is It Important?
The most significant advantage of a SLA is that it works as a quality guarantee. By defining the parameters of the service provided and project expectations, as a client you can be assured that what you get is what you pay for. And in the unfortunate event that you don’t get your money’s worth, the SLA will provide direction on options for corrective action or remedial recourse (such as discounted services).
What Does A SLA Include?
A SLA can help set targets and milestones by dividing the project into phases and stipulating the quality of the deliverables for each of these phases. The SLA can clearly incorporate standards and the role and duties of the parties for each project phase and the project in its totality. The SLA will also generally touch up monitoring mechanisms aimed at gauging the quality of the service. As we’ve already discussed, it will also include remedial options and penalties.
Do You Need A SLA?
The SLA concept is most popular in the IT services niche. You should look into getting a SLA if you’re hiring a service provider and you’re interested in retaining them for subsequent projects. The SLA is especially useful if you’re working with someone you haven’t worked with before. It is also recommended if you’d like to split up your project into smaller segments.