Software company’s overseas expansion for English NDA (Veat) review

Law firm Veat received a request from software development and supply company A (hereinafter referred to as "the client") to review English NDA (Non-Disclosure Agreement) for overseas expansion.

When concluding a contract with an overseas company, and the client's software is provided for preliminary review purposes, the importance of an 'English NDA (Non-Disclosure Agreement)' is extremely high. Before concluding an English NDA (Non-Disclosure Agreement), it is essential to review the content of the contract, identify any unfavorable clauses, and make necessary revisions.

Considering that Law firm Veat is likely to be in a position to provide information, we conducted a thorough review to ensure that the client is not disadvantaged as the information provider.

English NDA (Non-Disclosure Agreement)

An English NDA (Non-Disclosure Agreement) serves as an important legal safeguard in the software development and supply process. When negotiations with overseas companies take place, confidential information is typically shared, making legal procedures to protect it essential. Especially, when in a position to provide software, strong legal protection is necessary to reduce the risk of trade secrets, technical information, and business details being leaked or used without authorization. An English NDA (Non-Disclosure Agreement) clearly defines the obligation of confidentiality and specifies the legal liability that may arise from violations, thereby protecting the company's confidential information.

Review of Key Items in English NDA (Non-Disclosure Agreement) is Essential!

If what information the client will provide is not clearly defined, the scope of protection for confidential information may become unclear, potentially leading to disputes later. Furthermore, if the scope is too broad or, conversely, too narrow, important information related to the software may not be adequately protected.

Therefore, the scope of confidential information must be clearly defined, and must sufficiently protect information that could pose a real business risk. To achieve this, specific examples can be provided or clear definitions inserted to prevent the scope of information from being excessively expanded, and methods for adding specific conditions, if necessary, can be suggested.

Because the obligation of confidentiality may continue even after the contract expires, the contract must clearly specify a 'return or destruction of confidential information' procedure. If this provision is unclear, there is a risk that the overseas company may retain or use confidential information even after the contract expires. Clear and specific procedures must be established to ensure that confidential information is adequately protected even after termination of the contract.

If the confidentiality period is too long or too short, disputes may arise between the contracting parties. For example, if the client’s software is a technology that may eventually transition into the public domain, an unnecessarily long confidentiality period would be unreasonable. Conversely, if the client’s core technology or exclusive information has a confidentiality period that is too short, the client's confidentiality may not be adequately protected. Setting an appropriate confidentiality period is essential.

The governing law specified in the English NDA (Non-Disclosure Agreement) determines which country's law will be applied in the event of a dispute, so it is important to select a country that aligns with the client’s business environment and legal requirements. Even though the client is based in Korea, as the contract is with an overseas company, it is necessary to clearly define which country's law will be applied in the event of a legal dispute.

Typically, the laws of the United States or the United Kingdom are chosen, but the legal characteristics of each country may affect the outcome of dispute resolution. Therefore, careful selection of the governing law is necessary to reflect the client’s favorable conditions.

English contracts, including NDAs (Non-Disclosure Agreements), are documents with more legal and linguistic complexity than standard business documents. Understanding these contracts thoroughly and proposing appropriate amendments from the client’s perspective requires expertise in the field.

Law firm Veat, centered around Senior Foreign Attorney Song Woo-seok, who has efficient communication skills and abundant legal advisory experience related to international contracts, thoroughly reviews and proposes amendment suggestions from the client’s perspective to maximize the client’s interests and receive legal protection in contracts with overseas companies.

Furthermore, startups and IT companies looking to expand their business in the global market should be aware of the potential to experience legal risks related to English contracts, and we provide customized solutions that consider the client’s business goals and direction, providing practical support for successful overseas expansion.

If you need legal advice regarding IT, English contracts, or NDAs (Non-Disclosure Agreements), please feel free to contact Law firm Veat.

Thank you.
Law firm Veat