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Contract Knowledge Centre · Protective
An agreement restricting what one or both parties may do with confidential information disclosed to them.
It is often the first document signed in a commercial conversation, and the one people read least. A one-way NDA in the other party's favour is a common and avoidable outcome.
What each clause is for, and what to look at in the wording you have been given.
Definition of confidential information
Sets what is actually protected.
What to check: Whether it is broad enough to cover what you will share, and whether it captures information you would rather not be restricted about.
Mutual or one-way
Determines who carries the obligation.
What to check: That it is mutual where both parties will disclose anything of substance.
Permitted disclosures
Allows disclosure to advisers, staff and where legally required.
What to check: That your normal working arrangements - advisers, team, cloud tools - are not accidentally breaches.
Duration
Sets how long the obligation lasts.
What to check: Whether a perpetual obligation is realistic for the information involved.
Return or destruction
Deals with information at the end of the discussion.
What to check: Whether it is practically possible given backups and archived systems.
Any one of these can have an innocent explanation. Ask for it before you sign.
When to speak to a lawyer