Confidentialitymedium Risk Severity

Confidentiality & Non-Disclosure Clause

If terms are too narrow, your confidential roadmaps or client lists can be leaked legally. If terms are too broad, you could be sued simply for using general skills you learned during the project.

Plain-English Definition

A confidentiality provision restricts how parties handle, protect, and share proprietary commercial, financial, or technical information exchanged during a contract.

Standard vs. Protective Language

Compare typical counterparty-favored phrasing against our attorney-approved balanced alternative.

Typical Aggressive LanguageFavor: Counterparty
Receiving Party shall protect Disclosing Party's Confidential Information with the same degree of care it uses for its own confidential information, but in no event less than reasonable care. Receiving Party shall not disclose Confidential Information to any third party except employees and legal advisors with a strict need to know.

⚠ Often leaves you exposed to uncapped liabilities or third-party indemnities without defense control.

LegalGPT Safer SubstituteRecommended
Receiving Party shall hold Disclosing Party's Confidential Information in strict confidence for a period of three (3) years from disclosure. Confidential Information shall exclude information that is: (i) publicly known without breach; (ii) already in Receiving Party's possession without restriction; or (iii) independently developed without reference to Disclosing Party's data.
Balanced mutual liability & defense control

Dangerous Red Flags in this Clause

If you spot any of these phrases or omissions in your contract, pause and propose counter-language immediately:

No expiration date on standard commercial data (perpetual confidentiality)
Missing exclusions for publicly available or independently developed information
Unilateral protection where only the counterparty's secrets are defended
Strict liability for any breach without requirement of negligence or bad faith

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Frequently Asked Questions

Does confidentiality last forever?

Standard commercial confidentiality typically expires 2–3 years after disclosure. Only genuine trade secrets (such as proprietary formulas or source code) should have indefinite protection.

Can I disclose confidential info if subpoenaed by a court?

Yes, provided the contract includes a 'compelled disclosure' carve-out requiring you to promptly notify the disclosing party so they can seek a protective order.

Agreements Containing This Clause

Commercial and employment contracts where the Confidentiality & Non-Disclosure Clause is routinely included and negotiated.

Related Companion Clauses

When redlining this provision, review these related clauses to prevent unintended liability shifts.