Permitted Receivers - OneNDA Provision: Difference between revisions

Latest revision as of 15:53, 30 May 2024

OneNDA Owner’s Manual™

A Jolly Contrarian owner’s manual™

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Original text:

The Receiver may share the Confidential Information with its Permitted Receivers, but only if they: need to know it, and only use it, for the Purpose, and have agreed to keep it confidential and restrict its use to the same extent that the Receiver has.

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Overview

The kinds of people you’ll want to allow access to the confidential information under a confidentiality agreement.

Summary

Who’s in

The anally-retentive amongst you — what? Oh, come on guys you know you are — anyway, you may like to define those individuals to whom one may pass Confidential Information to carry out the Purpose as “Necessary Persons” or something equally tedious.

Those people may be:

Professional advisers: Not usually controversial because they are by nature bound by professional protocol and fiduciary duties to respect confidentiality and may even buy you legal privilege for whatever that is worth these days. (There is some annoying thing where people try to carve out those subject to professional duties of confidentiality from the principal’s obligation to ensure they keep schtum. This is dumb, and should be stamped out.)

Employees: The corporate veil may be impermeable but you do need someone with a head, any kind of head, and a beating heart to read and deal with the confidential information on the limited company’s behalf — but more fearful types may try to restrict which of your employees are in the gang (see below).

Regulators: compulsory disclosure to competent regulatory bodies, courts, and so on. Marginally more controversial is the obligation to disclose at the polite but non-binding request of regulators. In any case, don’t agree to notify your counterparty of any regulatory requests. They may hotly insist they need to right to challenge the disclosure or take out an injunction or something but — well, yeah. Sure. For a better reason, see below.

Who’s out

Employees who don’t have a need to know: Especially those employed in front office trading capacities. The agent lending market has developed sophisticated masking strategies so that borrower’s books and records don’t carry the identities of their principals. If you are in the business of bringing in new clients don’t be alarmed at requests to restrict disclosure to KYC, credit, compliance and onboarding teams.

Affiliates, qua affiliates

It is a kind of obsession amongst a certain kind of legal eagle — usually, the same sort that will hotly insist on a counterparts clause — that one specify in elaborate detail which, or which sorts of, affiliate may have possession of the discloser’s innermost secrets.

The JC has never really understood this. A degree of control over another legal entity is surely an arbitrary marker which has nothing at all to do with one’s “purpose”, which one will have spent some time and intellectual energy explaining. Let that be your guide. For why should it make a difference that the person to whom you want to share the discloser’s good oil happens to be employed by a >51% related, or co-controlled, or parent or child — go on, shoot me — company?

If you sensibly contain the “purpose” and get your “permitted disclosees” right — namely those with a legitimate need-to-know the confidential information and who accept it with an equivalent degree of confidence, and for whom the contracting principle remains responsible, should they violate that confidence — then it really doesn’t matter if they are affiliates or not.

References

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-{{confianat|Permitted disclosees}}
+{{sman|onenda|v1|2(a)}}
-The kinds of people you’ll want to allow access to the {{confiprov|confidential information}} under a {{confi}}.
-===Who’s in===
-The anal amongst you — what? Oh, come ''on'' guys you ''know'' you are — anyway, you ''anal'' folk may like to define those individuals to whom one may pass {{confiprov|Confidential Information}} to carry out the {{confiprov|Purpose}} as “'''{{confiprov|Necessary Person}}s'''” or something equally [[tedious]]. Those people may be:
-*'''[[Professional advisers]]''': Not usually controversial because they are by nature bound by professional protocol and [[Fiduciary duty|fiduciary duties]] to respect [[confidentiality]] and may even buy you legal [[privilege]] for whatever that is worth these days.
-*'''Employees''': The corporate veil may be impermeable but you do need someone with a head, any kind of head, and a beating heart to read and deal with the {{confiprov|confidential information}} on the [[limited company]]’s behalf — but more fearful types may try to restrict which of your employees are in the gang (see below).
-*'''[[Regulator|Regulators]]''' — compulsory disclosure to competent regulatory bodies, courts, and so on. Marginally more controversial is the obligation to disclose at polite but non-binding request of regulators. In any case, don’t agree to notify your counterparty of any regulatory requests. They may hotly insist they need to right to challenge the disclosure or take out an injunction or something but — well, yeah. ''Sure''. For a better reason, see below.
-===Who’s out===
-*Employees who don't have a [[need to know]]: Especially those employed in front office trading capacities. The [[agent lending]] market has developed sophisticated masking strategies so that borrower’s books and records don’t carry the identities of their principals. If you are in the business of bringing in new clients don’t be alarmed at requests to restrict disclosure to [[KYC]], [[credit]], [[compliance]] and onboarding teams.
-===[[Affiliates]], ''qua'' affiliates===
-It is a kind of obsession amongst a certain kind of [[legal eagle]] — usually, the same sort that will hotly insist on a [[counterparts]] clause — that one define elaborately the sorts of [[affiliate]]s who may have possession of your counterparty’s innermost secrets. We at the JC have never really understood this. Why should it make a difference that a person whom you want to spill the beans to happens to be employed by a >51% related, or co controlled, or parent or childe — go on, shoot me — company? If you get “permitted disclosees” right — namely those with a legitimate need-to-know the information, who accept it with an equivalent degree of confidence, and for whom the contracting principle remains responsible, should they violate that confidence — then it really doesn’t matter if they are affiliates or not.
-===Direct contractual liability against disclosees===
-A nonce. Don’t go there: your very first lecture in the law of [[contract]], or [[agency]], should tell you why. The downstream disclosees are not parties to the contract. The contracting party therefore must certainly be liable for their breach of confidence, as if it had breached it directly. That is implied by the chain of contract – since recipients aren’t privy to the contract, the discloser can’t sue them, so it must surely be the contracting party’s responsibility to ensure that persons to whom it gives the information do not misuse it, and accept liability for their actions if they do.
-A fundamental truth, alas not recognised by many [[In-house lawyer|in-house legal eagles]]: ''you can’t absolve yourself of your own contractual obligations just by delegating them to someone else''.
-===Conditions===
-{{regulator requests}}
-{{sa}}
-*{{confiprov|Permitted disclosure}}
-{{ref}}