A confidentiality clause (or NDA - Non-Disclosure Agreement) protects sensitive business information from being shared with third parties. These clauses are essential but can be overly broad or perpetual.
“Receiving Party agrees to hold in strict confidence all Confidential Information disclosed by Disclosing Party and shall not disclose such information to any third party or use it for any purpose other than as expressly permitted herein. This obligation shall survive termination of this Agreement indefinitely.”
This requires you to keep all 'confidential information' secret forever. The problem is that 'confidential information' is often defined very broadly, and the indefinite time period means you're bound by this even decades later.
Overly broad definition of 'confidential information'
Perpetual or excessively long confidentiality periods
No carve-outs for information that becomes public
Unclear what constitutes a breach
One-sided protection without reciprocal obligations
For general business information, 2-5 years is typical. Trade secrets may warrant perpetual protection. Be wary of clauses requiring perpetual confidentiality for all information regardless of its nature.
Standard exclusions include: information already publicly known, information you knew before receiving it, information independently developed, and information received from third parties. Without these, you could be liable for information that isn't actually secret.
Yes, one-way NDAs are common when only one party is sharing information (like during due diligence). However, if both parties share information, mutual NDAs are fairer and protect everyone.
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A non-compete clause restricts your ability to work for competitors or start a competing business after leaving a company. These clauses can significantly impact your career mobility and earning potential.
An intellectual property clause determines who owns the work, inventions, and creative output produced during a business relationship. These clauses can have lasting impacts on your ability to use your own work.
A non-solicitation clause restricts your ability to recruit employees or solicit clients/customers from a company after your relationship ends. These can impact your networking and business development.