15 sept Confidentiality Agreement Compelled Disclosure
From the receiving party`s perspective, well-formulated NDAs should: (a) address the consequences of a breach of confidentiality, which may vary depending on whether the breach was intentional, negligent or through no fault of the injuring party; (b) expressly preserve the right of the disclosing party to seek appropriate remedies by recognizing that an offence may cause irreparable damage that cannot be adequately compensated by damages; and (c) include compensation for loss or damage (including claims of third parties) resulting from the breach. It should also be taken to define who can obtain confidential information with a view to promoting the authorised or stated purpose. It is often necessary to pass on information to professional employees or consultants (or even funding sources, related companies or sponsors, etc.), but this should be considered on a case-by-case basis. Ideally, these recipients are identified by name, but they should be identified at least by class and always on a « need to know » basis. The parties should be aware of the confidentiality obligations that must be imposed on such third parties as a precondition for the receipt of confidential information. Staff may be subject to confidentiality obligations as part of their employment contracts. There are certain ways to handle disclosure to professional consultants: a) they might be invited to become a party to an NDA, b) they may simply agree to keep information confidential, or c) the parties may simply rely on confidentiality obligations imposed on them by their professional organization. Parties to the information should endeavour to ensure that the receiving party takes responsibility for breaches of confidentiality committed by employees, consultants, related companies and other necessary recipients, although such request may be strongly rejected by the receiving party. Normally, companies have governing documents such as organizational protocols, articles of association or company agreements (United States) or articles of association (UK) that give the board of directors the power to appoint company officers to perform day-to-day functions such as signing contracts on behalf of the company.
In such cases, forced disclosure may lift the protection of an NDA. Otherwise, you make disclosures at your own risk, because the receiving party may argue that it has not accepted the confidentiality of the disclosed information prior to the signing of the NDA. In almost any business agreement or corporate transaction, the parties should ensure that they agree to sufficiently protective confidentiality rules, that take into account the practical aspects of managing the transaction and that survive adequately when the agreement or agreement is concluded or disintegrates. . . .