NDA: Permitted Disclosures

Nov 14, 2016

Parties entering into a non-disclosure agreement or NDA would like to share confidential information for particular purposes while also not sharing such confidential material to unauthorized individuals or third parties.

Notwithstanding the major purpose of an NDA, which is to safeguard confidential information, An NDA lawyer may also seek to identify specific circumstances when parties could disclose the shared information, such as in legal proceedings. Disclosure could be permitted in such cases, provided that the requesting party informs the other party in advance.

The clause for permitted disclosures may also specify a class of individuals who may access the confidential information, the requirements for permissible disclosure, and the liability for unauthorized disclosure. The class of individuals may include an entity’s officers, directors, employees, lawyers, and other affiliates. The scope of disclosure may depend on the extent of the list of permissible disclosure. Therefore, both parties in an NDA should clearly define the designation and authority of those who have access to confidential information.

Generally, the requirements for disclosure may include notification of obligations, requirement to execute a confidentiality agreement with the third party, and liability on the receiving party for any unauthorized or inadvertent disclosure of its employees, agents, or even third parties. 

To better facilitate an NDA that sets out the goals of both parties and that avoids liabilities, it could be helpful to seek legal assistance from an NDA attorney in defining the terms and conditions of the agreement and in making sure the provisions are appropriate. 

Heliane Fabian