What is contained in a standard Confidentiality Agreement for Australia?
A standard Confidentiality Agreement or NDA in Australia is typically a deed and not an agreement. The key clauses include:
- a definition of what is confidential information;
- a statement of the purpose for which the confidential information can be used;
- clauses pertaining to who is bound by the document;
- exceptions to the obligations of confidence; and
- protective measures which must be taken.
Confidential Information definition
The definition clause in a Confidentiality Agreement is usually fairly broad so that it encompasses all the information the parties share. For instance, it may include:
Any discussion of, or materials for, business meetings, business plans, business direction, business models, business methods, business processes, marketing plans and strategic plans, whether finalised or proposed.
Depending on the circumstances it may be wise to make specific references to certain types of information or limit it to “information that is marked as confidential.”
Purpose of a standard Confidentiality Agreement?
Like the definition of confidential information, the purpose for which the confidential information can be used, should be defined. Examples include:
- Engaging in discussions with a view to entering into a software development agreement.
- Conducting an assessment of whether or not the parties will pursue the proposal.
- Enter into discussions and to exchange information in relation to the requirements and process to becoming a distribution partner.
Who is bound by a standard Confidentiality Agreement?
Only parties to the document are bound by the agreement or deed. However, there are different forms of these documents. They include:
- Unilateral Confidentiality Agreements – which only bind one party. One might argue these are the least useful because it is hard to have confidential discussions when only one party is bound to treat the information as confidential.
- Mutual Confidentiality Agreements – which bind two parties to the same obligations of confidence.
- Multilateral Confidentiality Agreements – which have three or more parties. Each of which may have the same or different obligations of confidence.
Exceptions in a standard Confidentiality Agreement?
It is important to consider the exceptions to the obligations of confidence which may need to be included. A party will typically be allowed to disclose information:
- to their lawyers, accountants and other professional advisors;
- where the information was known to the party before entering into the deed or agreement;
- in some cases under continuous disclosure rules imposed on ASX listed companies;
- when authorised by the other party; and
- which comes into the public domain.
Protective measures which exist in a standard Confidentiality Agreement?
Protective measures are usually included in a standard Confidentiality Agreement. Such measures include obligations to:
- keep information secure;
- mark information as confidential;
- notify the other party about any disclosure of the confidential information; and
- return or destroy the information at the end of the negotiations or when the purpose is achieved.
While it is common to have a clause requiring the confidential information to be returned or destroyed this is not always possible. As such exceptions should be made to allow a party to retain confidential information such as details of financial transactions or board minutes.
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