The Freelancer Who Lost Their Portfolio
When an overly broad NDA prevents showcasing your best work
The Parties
Alex is a freelance UX designer who was hired by TechStartup Inc. to redesign their entire mobile application. The project lasted 8 months and represented some of Alex's best work to date.
The NDA Issue
Before starting, Alex signed TechStartup's standard NDA, which included this clause:
"Contractor shall not disclose, publish, or display any work product, designs, or materials created for Company, in any medium, for any purpose, without Company's prior written consent."
Alex signed without negotiating, assuming they could get permission later to show the work in their portfolio.
What Happened
The Outcome
Alex lost the ability to showcase 8 months of their best work. When applying for a senior designer position at a dream company, they couldn't demonstrate their mobile app experience. They estimated losing approximately $40,000 in potential earnings from the career setback.
Lessons Learned
- Negotiate portfolio rights BEFORE starting work, not after
- Get portfolio permissions in writing from an authorized signer
- Include specific portfolio carve-out language in your NDA
- Consider "delayed display" rights (e.g., 6 months after launch)
- Never rely on informal verbal approvals for NDA modifications
The Developer's Pre-Existing Code Trap
When IP assignment swallows tools you owned before the project
The Parties
Jordan is a freelance backend developer who spent 3 years building a personal library of reusable code components. Enterprise Corp hired Jordan for a 6-month project to build a customer portal.
The NDA Issue
The NDA/contractor agreement included standard work-for-hire language:
"All work product, code, designs, and materials created by Contractor in connection with this engagement shall be considered work-for-hire and shall be the sole property of Company."
Jordan assumed "created in connection with" meant only new code written specifically for this project, not their existing libraries that they incorporated.
What Happened
The Outcome
After expensive legal negotiations, Jordan retained ownership of the pre-existing code but had to pay $15,000 in legal fees and sign an amended agreement clarifying the carve-out. The relationship with Enterprise Corp was destroyed, and Jordan lost a potential long-term client worth approximately $100,000 annually.
Lessons Learned
- Always document pre-existing materials BEFORE signing
- Create an "Exhibit A" listing your tools, libraries, and templates
- Negotiate explicit carve-outs for pre-existing IP
- Use version control timestamps to prove prior existence
- Consider licensing (not assigning) pre-existing materials to clients
The Subcontractor Breach Cascade
When a sub's mistake becomes the prime contractor's liability
The Parties
Digital Agency LLC won a contract to build a prototype for MedDevice Inc., a medical device company. The agency brought in Sam, a freelance developer, as a subcontractor to help with backend development.
The NDA Issue
Digital Agency had a comprehensive NDA with MedDevice, including a flow-down requirement:
"Agency shall ensure that all subcontractors are bound by confidentiality obligations no less protective than those contained herein. Agency shall remain fully liable for any breach by its subcontractors."
However, the agency only gave Sam a brief verbal overview of confidentiality requirements - no formal subcontractor NDA was signed.
What Happened
The Outcome
Digital Agency faced a lawsuit for breach of the NDA. Without a signed subcontractor agreement, they had limited recourse against Sam. The agency settled for $85,000, lost MedDevice as a client, and suffered reputational damage in the medical device industry. Sam faced no direct liability because no binding agreement existed with the end client or even with the agency.
Lessons Learned
- ALWAYS get signed NDAs from subcontractors before sharing any information
- Use formal flow-down agreements that mirror your prime contract requirements
- Train subcontractors on confidentiality - what they can and cannot discuss
- Prohibit public forum posts about client projects
- Include audit rights in subcontractor agreements
- Consider insurance for subcontractor-related liabilities
The International Enforcement Challenge
When a cross-border NDA proves unenforceable
The Parties
US Innovations Inc., a California startup, hired Raj, a developer based in India, through a freelance platform. Raj would have access to US Innovations' proprietary algorithm for a 3-month project.
The NDA Issue
US Innovations used their standard NDA with California governing law and exclusive jurisdiction in California courts:
"This Agreement shall be governed by California law. Any disputes shall be resolved exclusively in the state or federal courts located in San Francisco, California."
No international enforcement provisions, arbitration clause, or India-specific considerations were included.
What Happened
The Outcome
The California judgment was essentially worthless. India does not have a treaty with the US for automatic enforcement of judgments. US Innovations would need to re-litigate the case in Indian courts, which would take years and cost hundreds of thousands of dollars - far more than the project was worth. The company wrote off the loss and the competing product continued to operate.
Lessons Learned
- For international contractors, use arbitration (enforceable in 170+ countries via New York Convention)
- Consider the contractor's jurisdiction when structuring agreements
- For high-value IP, consider requiring contractors to have local assets you could pursue
- Use milestone-based payments to limit exposure
- Conduct due diligence on international contractors before sharing sensitive information
- Consider cyber insurance that covers international losses
The Well-Negotiated NDA
How proper preparation led to a successful long-term relationship
The Parties
Maria is an experienced marketing consultant who was approached by FinanceApp Co. to help with their product launch. Having learned from past experiences, Maria approached the NDA negotiation strategically.
The NDA Approach
When FinanceApp sent their standard NDA, Maria reviewed it carefully and requested these modifications:
- Changed from unilateral to mutual NDA (protecting her methodologies too)
- Added a carve-out for her pre-existing marketing frameworks
- Included portfolio rights with 6-month delay after launch
- Limited confidentiality term to 3 years (trade secrets excepted)
- Capped her liability at 2x the fees she would earn
- Added a "residual knowledge" clause for general learnings
What Happened
The Outcome
Both parties benefited from the clear, balanced agreement. Maria could use the work in her portfolio, which helped her land other clients. FinanceApp appreciated having a contractor who understood legal agreements and acted professionally. The relationship became one of Maria's most valuable, generating over $150,000 in revenue over three years.
Lessons Learned
- Professional NDA negotiation builds trust, not tension
- Clients respect contractors who understand legal agreements
- Clear terms upfront prevent disputes later
- Balanced agreements lead to better long-term relationships
- Taking time to negotiate properly pays dividends over time
Related Resources
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