Confidentiality


A Confidentiality or Non-Disclosure clause may be included in a wide range of agreements where the parties disclose or provide access to confidential information. Alternatively, the obligations may be detailed in a separate Non-Disclosure Agreement, where each clause element—itemized in the clause elements section—is treated as a separate clause.

The clause details the obligations and forbearances required on the part of a party receiving confidential information. Breach of the obligations may give the other party the right to terminate the agreement and recover damages.

Standard Clause

Confidentiality

Confidentiality Obligations

Confidentiality. The Receiving Party agrees to hold Confidential Information in confidence in accordance with the terms of this Agreement.

Non-Use. The Receiving Party agrees to use Confidential Information solely in accordance with the terms of this Agreement.

Confidentiality Standard of Care. The Receiving Party shall exercise at least the same degree of care as it uses with regard to its own Confidential Information, but in no event less than reasonable degree of care, in protecting the Disclosing Party's Confidential Information.

Permitted Disclosure of Confidential Information

Authorized Disclosure. The Receiving Party shall limit dissemination of the Confidential Information to its Authorized Representatives who are required to have access to the Confidential Information, consistent with the Purpose of disclosure.

Disclosure Obligations. The Receiving Party shall instruct its Authorized Representatives of the obligations under this Agreement.

Responsibility. The Receiving Party shall be responsible for any breach of this Agreement by its Authorized Representatives.

Required Disclosure of Confidential Information. In the event that the [Receiving Party] is compelled by law to disclose any Confidential Information:

Notice of Disclosure. The [Receiving Party] shall provide the [Disclosing Party] with prompt written notice of the order to disclose.

Cooperation to Seek Protective Order. The [Receiving Party] shall cooperate with the [Disclosing Party] to obtain a protective order or other appropriate remedy.

Limited Disclosure. In the event that a protective order or other remedy is not obtained, or the Disclosing Party waives compliance with the provisions of this Agreement, the [Receiving Party] shall:

disclose only the portion of Confidential Information that is legally required to disclose [in the written opinion of its counsel]; and

exercise all reasonable efforts to obtain reliable assurances that confidential treatment will be afforded to Confidential Information.

Return of Property. At [Disclosing Party]'s request, all Confidential Information in the possession of the [Receiving Party] shall be [promptly | immediately] returned to [Disclosing Party] or destroyed.

Definition of Confidential Information

Included Information. Confidential Information means any [material] non-public information disclosed to the [Receiving Party], whether orally, in writing, through any means of communication, by or on behalf of the [Disclosing Party].

Excluded Information. The restrictions of this Agreement on use and disclosure of Confidential Information will not apply to:

Public Information. Information that is or becomes publicly known without the breach of this Agreement.

Already Known. Information that at the time of disclosure under this Agreement is already known to the Receiving Party without any restriction on its disclosure.

Third Party Source. Information that is or subsequently comes into the possession of the Receiving Party from a third party without violation of any contractual or legal obligation.

Independently Developed. Information that is independently developed by the Receiving Party without the use of Confidential Information or breach of this Agreement.

[The Receiving Party will have the burden of proof regarding the applicability of any exception.]

Clause Alternatives

Confidentiality

Confidentiality Obligations. The Receiving Party agrees to hold Confidential Information in confidence in accordance with the terms of this Agreement.

Non-Use. The Receiving Party agrees to use Confidential Information solely in accordance with the terms of this Agreement.

Definition of Confidential Information. "Confidential Information" shall include all [material] [non-public] [business-related] information, written or oral, disclosed or made available to Receiving Party, [directly or indirectly,] through any means of communication [or observation] by [Disclosing Party [or any of its affiliates or representatives] to [or for the benefit of] Receiving Party.