When drafting confidentiality provisions inside NDAs, attorneys should incorporate language designed to protect their company or clients’ critical business information without making the terms of the agreement too one-sided. Drafting an agreement with language that is too broad may not offer the protection the business needs. Similarly, using templates or “boilerplate” contract language can also be ineffective because the provisions do not reflect your specific needs or intentions. Companies will generally create a custom non-disclosure agreement that can be sent to various people, companies, and/or business partners for their review and execution. Companies may also receive NDAs from counterparties that need to be reviewed and revised in order to meet their internal guidelines.
Attorneys drafting or revising NDAs should consider incorporating the following provisions:
Exceptions to “Confidential” Information
One of the most important elements of any confidentiality agreement is defining what information is deemed “confidential.” This is the information that the client wants to protect and it may be defined in either general or specific terms in the NDA. However, it can also be advantageous to include an exclusions clause, which protects the receiving party from claims that it breached the agreement’s terms under certain circumstances. Exclusions clauses often state that information loses its “confidential” status if it is in the public domain, if the receiving party received it from another source, or if the receiving party already had the information before entering into the agreement.
Scope of the Agreement
NDAs should also include language stating how the agreement restricts the receiving party. It is not enough in most cases to state that the receiving party is prohibited from disclosing confidential information to others; the document should also restrict the receiving party from using the confidential information for its own gain. In other words, the confidentiality provisions should include both non-disclosure and non-use restrictions.
It is also critical to define how long the NDA will stay in effect. Without a clear time scope, a company could find itself bound far longer than practical to implement. The NDA should also include a definition of who is bound by the agreement. Many large companies have multiple subsidiaries or partner companies or use outside experts for assistance, and the agreement should be clear on to whom the information can be disclosed.
Obligation to Protect Confidential Information
Consider including provisions that detail the receiving party’s obligation to take actions to maintain and protect the confidential character of the information it receives under the agreement. The specific actions will depend on the nature of the information shared, but should be reasonable under the circumstances.
Non-Solicitation Provisions
If the receiving party will interact with the disclosing party’s employees, the NDA might also include non-solicitation language. This type of provision is designed to keep the receiving party from hiring employees away from the disclosing party during the term of the agreement and for a set period of time after the agreement ends.
To learn about Baer Reed’s NDA review and negotiation services – and other business services from Baer Reed – contact us today.
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.