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Confidentiality

May 24, 2008

Confidentiality agreements and NDAs seem to have proliferated in recent years, doubtless another manifestation of our information society. This has led to growing focus on ‘best practice’ (IACCM in fact has a Wiki on this subject with some model terms).

In response to a question he received, drafting expert Ken Adams has now weighed in on this subject and his blog has attracted a range of extra comment. So for anyone interested in the niceties of confidentiality agreements – and in particular the question of whether there should be a specified term – you should visit http://adamsdrafting.com/system/2008/05/21/duration-confidentiality-agreements/. It offers some useful hints and tips for those who find themselves negotiating such agreements.

While protecting information is of course important, it is in my opinion sad that many legal groups seem to have moved to a fail-safe position of requiring such agreements with virtually anyone with whome the company speaks. In many cases, this has proven not only an expensive process to manage, but also adds significant delay to business operations and is an example of the lazy thinking that brings the contracts community into disrepute.  Our research has also shown that most companies have no centralized – and commonly accessible – repository, so the business people themselves have no knowledge of whether such documents exist or what terms should apply – rendering much of the effort a waste of time.

If we are indeed fated to be in a world where discourse can occur only under specific rules, companies should at least follow the example of corporations such as Cisco and Intel, which have fully automated the process (including electronic signatures) and can now execute Confidentiality Agreemetns and NDAs in a matter of hours, rather than the multiple days that remains common to most.

2 Comments
  1. Deepankar Ghosh permalink

    I agree that seeking of signed CAs/NDAs does not add much value other than for the sake of good record. It does wastes lot of time and resources when delay in its submission delays the placement of contract or delay in the tender process. Even if the information is leaked at any stage, it will be hard to prove the source from where its leaked and it would only add mor cost and time due to litigation.

    Hence scrap the CAs/NDAs as its not a pragmatic solution.

  2. Steven Harmon permalink

    As the tool manager of the Cisco solution referenced in this note, I have a deep interest in this topic and would be pleased to exchange best practices. In particular, I’m interested in determining whether appetite exists to standardize on some form of an “open source” NDA. In this model companies could spend more time focusing on documenting what is being disclosed and the permitted uses of the disclosure and less time arguing about the terms governing the exchange.

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