Confidentiality Agreement/NDA
April 20, 2009When involved in discussions/correspondence where sensitive commercial information is being provided to a third party it is advisable that a Confidentiality Agreement (sometimes called an NDA) is put in place.
A well drafted Confidentiality Agreement confirms that the information is being provided in confidence and focuses the receiving party’s mind on the importance that the other party places on their confidential information/intellectual property.
As part of our approach to doing business we consider it important that business people get off to the right start and are happy to provide an example of one of our short-form confidentiality agreements - you must copy and paste it from this site onto a word doc.
Please note that this agreement is the result of many deals and will need to be adapted to suit the particular circumstances of any other deal.
Please also note that although we are happy to provide in it’s present form we are not responsible if it is adapted incorrectly - please call us to discuss any part of it that you may require advice on.
Here are some key things to look out for:
1 Parties
If dealing with a representative of a company (for example) then make the company the party, not the individual and, ideally, have a director sign it off. If dealing with a partnership then make the partnership the party and have a partner sign it off. If dealing with a sole trader then have the sole trader sign it off personally, and in the name of the business.
2 Control the flow
A Confidentiality Agreement may be hard to enforce and therefore it is sensible (and less expensive) to not have to rely on it - therefore do not give way too much information unnecessarily.
3 What information is “confidential”?
The “purpose” (as defined) is hugely important. Clearly set out what information is considered to be “confidential” as one of the factors the Court may take into consideration is whether the owner of the information has treated it as confidential and whether that was made clear to the recipient.
4 Who may use the information?
Is it just for the receiving party? Their employees? Group companies? Collaborators?
Make it clear who can have access to the information.
5 Length of time the other party may use the information?
We would recommend going for the longest time possible and then waiting for the reaction. If the other side bite back then look to see how much time you realistically need such as 12, 24 or 36 months.
6 What happens to the information on expiry of the agreement?
We would recommend return and destruction. It is always very sensible to mark confidential information as “Confidential” (harder for the other party to claim they were not aware) and keep a record of what was actually provided.
7 Do you own/have the right to the information?
You may be asked to provide a warranty as to your right to disclose the information - if unsure take advice.
8 Give em a KIS !
This is the “Keep it Simple” method - we often see negotiations stall and relationships be uncessarily strained by a party downloading a document from the web that is utterly unsuitable in length and content. Being careful with your confidential information does not mean being awkward or difficult - try to make it as effortless as possible in order to keep a good commercial feeling between the parties.
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Example Confidentiality Agreement
[To be placed on client letterhead]
[Name of organisation to whom information being provided]
[Name of person involved]
[Address]
Date: __________ 200..
Re: Confidentiality Undertaking
Dear [insert name]
[Name of Client] (”Business”) have allowed you access to certain information concerning the Business and its activities in order to allow you to [fill in here the purpose of the disclosure of the information] (the “Purpose”).
By your signature below, you hereby acknowledge and agree to keep all such information furnished to you by the Business strictly confidential on the following terms and conditions:
1. Certain business, technical, financial, operational, administrative, marketing, economic, trading and other information and material in connection with and relating to the affairs of the Business (and any affiliates) may be disclosed by or on behalf of the Business to you either in written form or orally. This information and material, together with all information deriving from our discussions and negotiations and any memoranda and reports and valuations derived from any of the foregoing (whoever prepares them) is referred to in this letter as “Confidential Information”.
2. You will:
a. keep Confidential Information secret and strictly confidential;
b. not, without the prior written consent of the Business, disclose any Confidential Information, whether in writing or orally, in whole or in part, to any other person;
c. use Confidential Information for any purpose, or for the benefit of any other person, other than in connection with the Purpose;
d. reproduce or reduce to writing any Confidential Information; or
e. not make any commercial use of the Confidential Information or use it other than for the Purpose without the express prior written consent of the Business.
3. The above undertakings do not apply to any Confidential Information which is in the public domain through no default on your part in your obligations under this letter.
4. You will keep safely all written Confidential Information provided to you and any copies made by you. You will, upon demand by us or if you cease to be interested in the Purpose, return to us or destroy any documents containing any Confidential Information. In addition, you will, in these circumstances, erase all Confidential Information from any computer, word processor or any other device containing such information.
5. You agree fully to indemnify and keep indemnified the Business against any losses, damages, liabilities, expenses, claims and proceedings of any nature whatsoever as a result of or arising out of any failure by you to comply strictly with any term or provision of this letter.
6. The terms of this letter shall continue in force notwithstanding the fact that the Purpose may have been terminated and regardless of the reasons for such termination.
7. The terms of this letter will be governed by, and construed in accordance with Irish law and shall be subject to the non exclusive jurisdiction of the Irish Courts.
We would be grateful if you would acknowledge your acceptance of the terms of this letter by signing and returning to us the attached copy of it.
Yours sincerely,
_____________________________
[Director name] duly authorised for and on behalf of
[name of company] Limited
I/We agree to the terms set out in the Business’s letter, of which this is a copy.
Signed: ___________________
Name: ___________________
Duly authorised for and on behalf of:
———————————————-
[ Fill in here ]
Dated: _____________200..
Please contact David on dreilly@dreilly.ie for further information on this topic or any other legal problem or matter.
