Contract Clause Guide

Confidentiality Clauses: Protecting Sensitive Information

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.

Example Clause

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.

What This Means

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.

Common Risks to Watch For

1

Overly broad definition of 'confidential information'

2

Perpetual or excessively long confidentiality periods

3

No carve-outs for information that becomes public

4

Unclear what constitutes a breach

5

One-sided protection without reciprocal obligations

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