Confidentiality agreement

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NDA Anatomy™
JC’s guide to non-standard confidentiality agreements.
For the OneNDA, see the OneNDA Anatomy

Do you promise not to tell, and if you do, do you acknowledge damages may not be an adequate remedy?

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confidentiality agreement
/ˌkɒnfɪdɛnʃɪˈæləti/ /əˈgriːmənt/ (n.)

(Also known, to those for whom the glass is half-empty, as a “non-disclosure agreement”, or an “NDA”. Or a “confi”.)

1. (Forensic evolution) The ostentatious courtship display of a fecund legal eagle. Identified as a kind of Darwinian textual selection because the length and gravity of the terms of a non-disclosure agreement varies in exact inverse proportion to its subject matter. The more fatuous the “confidential information”, the more stentorian in term and baroque in expression the NDA tends to be. Thus, a legal department whose plumage boasts an enormous multicolored NDA is broadcasting to the rest of the market, “look how fertile I am! I can insist on this transparently idiotic legal contract and people still sign it! It is absurd along every conceivable dimension, yet, here I still am, my business in rude health!”

2. (Reg tech) Any class of legal contract sufficiently common, homogenous, predictable and dull that a machine-learning proof of concept will appear to work, in some superficial way, for a period of time at least as long as the general counsel’s attention span. (So named because the confidentiality agreement is the only such contract in wide use). Hence: “Hi I would like to pitch you my new software as a service offering, which can intelligently automate your entire legal operations platform. It runs on chatbots and natural language processing and/or a room full of captive economic migrants in Khazakstan. It rocks. I can give you a half-hour demo. So I can set up the POC, can you send me a few sample...”
“Let me guess: a few sample confidentiality agreements?”
“Oh right. I see. Hey look sorry, I have to hop.”

The NDA space race

The trajectory of “NDA as legaltech exemplar” bears a striking similarity with the space race.

Firstly, competitors in this stampede towards the singularity all talk a great game about their magical technology (machine learning, neural networks, general AI etc) when in fact it is runs from a call-centre full of Bulgarian school-leavers equipped with slide rules, compasses, protractors and pencils (if lucky) and vacuum cleaner nozzles, duck tape, tin foil and string (if not). In fairness, there is general intelligence involved; it’s just not artificial: it belongs to the school-leavers).

Secondly, virulent conspiracy theories circulate in underground networks if legal eagles which doubt whether there was ever any technology involved at all, theorising instead that the whole idea of a confidentiality agreement is just an elaborate hoax.

Thirdly, allowing for a moment it did work, this moon-shot cost a hell of a lot of time and money and was a huge distraction for a what was a dry, lifeless, inert, joyless and ultimately fairly pointless journey. It is as if the Eagle triumphantly landed on Planet NDA, they took selfies, horsed around for a bit with a space buggy and some golf clubs, collected some pumice and came home. Suddenly it’s 60 years lateral, no one’s been back to Planet NDA since, let alone colonised the rest of the galaxy.

What should be in an NDA

Let’s be blunt about this: there is a special place in hell for any advisor who serves up a confidentiality agreement more than 3 pages long. Even three pages is purgatorially tedious. GET TO THE POINT. It’s a goddamn NDA, not the sale of your soul.

For those of you who can’t see your way clear to embracing the OneNDA, and who have not yet been asked to get your coat, here are the basic things it needs to cover: Who is who: Who is disclosing, who is receiving, or is it mutual? Mutual is good — as it plays to the idea that this is fair, but sometimes you want to just get across the line quickly, by offering confidentiality, without requiring it. That way, for example, you can just sign without seeking assent.

  • The confidential information: What counts as confidential information, and what doesn’t?
  • The Purpose: Why are you disclosing the confidential information? What is the project?
  • The confidentiality obligation itself: How is the receiver expected to keep it secret? Who can the receiver share with? On what terms?
  • Mandatory disclosure beyond the “Purpose”: What about compulsory disclosure under legal process, statutes and regulations?
  • Term: How long does the confidentiality obligation last?
  • Other: Representations and warranties, governing law, And for God’s sake WHATEVER YOU DO DON’T FORGET THE COUNTERPARTS CLAUSE.

What shouldn’t be in an NDA

The following often make their way into a confi agreement, though none really have any business being there.

The OneNDA

Nowadays there is a market standard commercial non-disclosure called the OneNDA. It solves a lot of problems, does away with much of the small-minded drizzling that tends to go with NDA negotiation, and really removes much of the need for this page. The JC was fairly heavily involved with its production so I’m kind of biased, but it’s pretty neat.

See also