Confidentiality Agreement - Term
One of the most important things to consider when negotiating a confidentiality agreement (A.K.A. non-disclosure agreement or NDA) is its term. In other words, how long do the confidentiality and other obligations of an NDA last? Most businesspeople and many lawyers think of "term" as being one fixed time period. But for most NDA applications, there actually are two time periods to consider. I'll use the wording "Disclosure Period" to describe the time period during which disclosures (of secret information) are made by the Disclosing Party (the owner of the secret information) to the Receiving Party (the contract party that receives the secret information from the Disclosing Party). I'll use the wording "Obligation Period" to describe the time period during which the Receiving Party must comply with its obligations of confidentiality and non-use. Most NDAs aren't very clear on the distinction between these two time periods, which can lead to ambiguity, and lawsuits.
In the next few columns, I'll examine a couple of approaches contract parties take to structure the term provisions of NDAs to take into account these concepts.
Good hunting.
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