3 - Term of Confidentiality

Confidentiality Clause (U.S. Legal Standards)

Confidentiality Obligations Each party agrees that it shall not, at any time, disclose to any third party any Confidential Information related to the business, operations, customers, clients, or suppliers of the other party, except as expressly permitted under this clause.

Permitted Disclosures A party may disclose the other party’s Confidential Information only:

(a) To its employees, officers, agents, subcontractors, or professional advisors who need to know such information to fulfill the party’s obligations under this Agreement, provided that such recipients are bound by confidentiality obligations at least as restrictive as those set forth herein. The disclosing party shall be responsible for ensuring compliance by such recipients.

(b) If required to do so by law, regulation, court order, or a governmental or regulatory authority with appropriate jurisdiction, provided that the disclosing party, where legally permissible, provides the other party with prior written notice and cooperates in seeking confidential treatment of the information.

Use Restriction Neither party shall use the other party’s Confidential Information for any purpose other than fulfilling its obligations under this Agreement.

This clause remains in effect after the termination of the Agreement, ensuring continued protection of Confidential Information.

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This revision aligns with U.S. legal standards by: ✔ Clarifying that confidentiality obligations apply both during and after the contract’s term. ✔ Ensuring disclosures are limited to necessary recipients with confidentiality protections. ✔ Addressing legal disclosure requirements while providing protections where possible. ✔ Explicitly holding parties responsible for ensuring their employees and subcontractors comply.

Plain English Explanation of the Confidentiality Clause (U.S. Legal Standards)

• This clause requires both parties to keep each other’s confidential business information private and not share it with anyone unless permitted.

• Confidential Information includes trade secrets, customer lists, business strategies, financial data, and any other non-public information.

• Restrictions on Disclosure: The parties cannot share Confidential Information except in the following cases:

  1. With their own employees, contractors, or advisors who need the information to carry out the contract. These individuals must also keep it confidential.

  2. When legally required by a court, government agency, or law enforcement. If allowed, the disclosing party should notify the other party before disclosure and try to protect the information.

• Use Limitation: The Confidential Information can only be used for fulfilling the contract. It cannot be used for any other reason without permission.

• Confidentiality Continues After the Contract Ends: The duty to keep the information confidential remains in effect even after the contract is terminated.

Key Takeaways:

✔ Protects sensitive business information shared under the contract. ✔ Limits disclosure to specific people who need the information for contract purposes. ✔ Requires employees and contractors to follow the same confidentiality rules. ✔ Allows disclosure only when legally required, with protections if possible. ✔ Ensures confidentiality obligations continue after the contract ends.

This explanation aligns with U.S. legal principles by emphasizing trade secret protection, limiting disclosure, and ensuring continued confidentiality beyond the contract term.