Negotiating Confidentiality Agreement

It is September….
Last week i gave an CLE training regarding Confidentiality Agreement.
Here the following key points:

-a Confidentiality Agreement (CA) arise in various business arrangement (employment, M&A, IP, joint venture, commerce). The main purpose of a CA is to protect sensitive information from unauthorized disclosure by regulating how the parties manage the information.

-a CA also a tool to give the disclosing party control over process. The disclosing party maybe will disclose deep secrets at the last possible moments.

-a myth, a CA does not oblige the disclosing party to supply all information to the receiving party. Such obligation is provided in other document.

-key concerns in negotiating a CA:
a. disclaimer of accuracy. an information under CA always the disclosing party’s internal document made by disclosing party’s employee. It is subject to diligence standard implemented by the disclosing party (up-to-date or error-free). By using a disclaimer, the disclosing party do not need to re-check its information to ensure that the information being given to the receiving party is accurate or complete.

b.residual clause. a residual clause basically states that information that stays in the head of receiving party’s personnel can be used for any purpose. Disclosing party should strongly resist to this clause. Residual clause dangerously damages the interest of disclosing party. It disincentives the disclosing party to disclose its deep secrets.


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