Thoughtfully negotiating the terms of NDAs can protect your company’s rights and interests, as well as those of the other party. One key element of any non-disclosure agreement is the duration or term. When negotiating an NDA, carefully consider how long the agreement should be enforceable and what should happen to confidential information obtained or exchanged by the parties after the end of the agreement’s term.
Term of Agreement
The party on the disclosing end of the NDA has an interest in making the term of the agreement as long as reasonably possible, while the receiving party may want to limit the agreement’s term. There isn’t a single “correct” term for NDAs. Instead, the duration will vary depending on the underlying circumstances. In general, the term of a non-disclosure agreement should be reasonably related to the type of information protected and the length of time confidentiality can be reasonably expected.
While businesses sometimes create and enter into NDAs with perpetual durations, courts may invalidate such provisions if they find perpetual duration is not reasonable, based on the nature of the protected information. For example, an NDA with perpetual duration may be appropriate for protecting trade secrets, but may be overly restrictive if the information subject to the NDA is ordinary business information. In the case of ordinary business information, NDA terms often range from one year to five years, depending on the parties’ needs.
Return or Destruction of Information
An NDA should also specify what happens to the information collected by the receiving party at the end of the agreement’s term. When negotiating an NDA, consider the advisability and feasibility of obligating the receiving party to either return or destroy all confidential information obtained under the agreement.
If your agreement includes a “return or destroy” provision, it may make sense to also include certain exceptions to that provision. For example, if the receiving party has a legal or regulatory obligation to maintain certain information, the NDA could create an exception for that information.
Baer Reed provides efficient and cost-effective NDA review services to support corporate legal departments. Contact us to learn more about how Baer Reed can help maintain and turn around high volumes of NDAs.
Mr. Reyes graduated with honors from the Ateneo de Manila University, where he received the Procter and Gamble Student Excellence Award. He obtained his Juris Doctor degree from the Ateneo de Manila School of Law. During law school, Mr. Reyes was part of the Philippine delegation to the Willem C. Vis International Commercial Arbitration Moot held in Vienna, Austria. He was also a member of the Ateneo Society of International Law and the St. Thomas More Debate Society. He completed his internship at the Public Attorney’s Office. He wrote a thesis entitled: “To Kill A White Elephant: An Analysis of the Fiduciary Exception to the Corporate Attorney-Client Privilege”. Mr. Reyes is admitted to practice law in the Philippines and the State of New York.
Ms. Lardizabal-Manzano is a graduate of San Sebastian College-Recoletos, where she earned her B.A. in Political Science. In 2003, she received her law degree from Lyceum of the Philippines and was admitted to practice law in 2004.
Matthew Hersh earned a B.A. in Political Science from Columbia University in 1990 and graduated cum laude from Georgetown University Law Center in 1999. He also holds a master’s degree in international relations from the Georgetown University School of Foreign Service.
Cap. Avi Levak (Res. IDF) graduated from from Israel’s prestigious Ben-Gurion University of the Negev with a Bachelor of Science in Computer Science and Mathematics. He is also a Leadership and Communication coach trained in TuT coaching by Alon gal in Israel. Avi specializes in high-level, in-depth analysis of business and client needs, within systems and software strategy and architecture.
Ms. Tyler graduated cum laude from Georgetown University and received her law degree, cum laude, from Georgetown University Law Center. During law school, she interned at the United Nations Economic Commission for Europe. She also worked on The Tax Lawyer journal and was a member of the award-winning Barristers’ Council Mock Trial Team. Ms. Tyler is admitted to practice law in the State of California and the District of Columbia.
Ms. Cruz-Anonuevo graduated cum laude and top nine in her batch from Miriam College with a degree of Bachelor of Arts in InternationalStudies. She obtained her Juris Doctor degree from Ateneo de Manila University School of Law in Rockwell. During law school, she interned in Rivera, Santos, Maranan & Associates. She was also part of Ateneo’s Labor Law Bar Operations. She wrote her thesis on, “Stealing Privacy: Limitations on Media’s Photographic Invasion.,” Ms. Cruz-Anonuevo is admitted to practice law in the Philippines.
Ms. Aquino-Batallones obtained a Bachelor of Arts degree in Development Studies (with Minors in Global Politics and Hispanic Studies) from the Ateneo de Manila University. In 2011, she received her Juris Doctor degree from Ateneo de Manila University School of Law. During law school, she interned at Romulo Mabanta Buenaventura Sayoc & de los Angeles then became an intern of Ateneo Legal Services Center’s Clinical Legal Education Program.
Mr. De Guzman graduated from San Beda College with a degree of Bachelor of Arts Major in Economics and received his law degree from San Beda College of Law. He is multilingual and is fluent in three languages: Chinese, Filipino, and English. He was admitted to the Philippine Bar in 2003.