United States: Confidentiality And Nondisclosure Agreements – Odd And Different Are Peculiar

At least where I am sitting, for the last month it has rained nondisclosure agreements. On the one hand, these agreements have a certain cookie cutter repetitive quality. On the other hand, there seems to be no end to ingenuity in these things. The result is that something you hope would be straight forward and would not require much (any?) legal intervention, often does. So, here are some thoughts on things to think about when you read an NDA. Needless to say, this list is not comprehensive and – furthermore – I predict that the next one you look at will have something unique about it. (Parenthetically, please feel free to send me samples (redacted to eliminate anything that should not be disclosed – like the identity of the parties) of unusual provisions.) My last comments at the end of the list under the caption “Unusual Provisions” seem like the relevant comments to me. Anyway, here goes:

Parties to the Agreement

Consider who should be a party to the agreement. Should the agreement cover “affiliates”? The answer is probably yes.

Mutual or One-way

Consider whether the agreement should be mutual (i.e. each party is obligated to keep the other’s information confidential) or one-way (only one party discloses information and the other party is obligated to keep it confidential).

How Broad is the Definition of Confidential Information

Usually it is very broad. In particular note whether or not the information has to be specifically identified as confidential or whether it merely needs to be such that a reasonable person would understand that it is confidential. Depending on the circumstances you might want to go one way or the other on this. You may also want to identify certain specific categories of information as either confidential or non-confidential ...

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