Confidentiality and Non-Dealing Agreement
Businesses may exchange proprietary and sensitive information for many different reasons. It will often be the case that the party which has developed and owns that information will seek to keep it secret, allowing the recipient to use that information for limited purposes and prohibiting further disclosure.
This Confidentiality and Non-Dealing Agreement is designed for use alongside a service agreement. In some relationships between a company and a contractor, the provision of services by the contractor will require a degree of interaction between the contractor and the company's customers or clients. In many cases, the contractor will handle considerable amounts of confidential information relating to the company and its business - information which would be very useful to its competitors.
In addition to ensuring the protection of the company’s valuable proprietary information, provisions in this document aim to prevent future contact between the contractor and the company’s customers or clients, prohibiting future transactions between the contractor and those customers or clients, regardless of who approaches whom, in the absence of a waiver from the company.
This document has been updated to allow for the storage of confidential information in the cloud. New optional provisions address the use of a “data storage provider” by the recipient of the confidential information but only with the agreement of the disclosing party. Other parts of the document have also been amended to work with this option, including the recipient’s obligations to return or erase the confidential information at the end of the agreement (allowing for situations in which it may not be possible for technical or legal reasons for the recipient to fully erase the confidential information) and the optional data protection provisions. It is important to keep in mind that a disclosing party may resist the use of cloud storage by a recipient due to the necessary additional disclosure and the related reduction in control over the information. This will be a point of negotiation and professional legal advice may be necessary or desirable.
The terms of this agreement carefully regulate the recipient’s use of the confidential information and further ensure that the recipient obtains similar undertakings of confidentiality and non-disclosure from all relevant employees and third parties (e.g., sub-contractors) prior to the information being further disclosed.
The confidential information and the purposes for which it may be used should be described in the two schedules provided so as to ensure that both parties to the agreement know exactly what information is confidential and how that information may (and may not) be used. Storage of confidential information, permitted disclosure, mandatory disclosure (e.g., where required by law), and exceptions to confidentiality (e.g., where the information has entered the public domain through no fault of the recipient) are among the other key areas covered by this template.
Optional provisions cater for scenarios in which the confidential information includes personal data. One clause is designed as a “controller to controller” data sharing clause; the other is a “controller to processor” clause (with the disclosing party being the controller and the recipient being a processor, processing the personal data on the disclosing party’s instructions). Note that these clauses are designed for situations in which only a small amount of non-sensitive personal data is being shared between the parties. If a larger amount of personal data and/or higher risk personal data is involved, it may be preferable to use a dedicated data sharing or data processing agreement alongside this one. Note that if the recipient of the confidential information is storing it in the cloud using the services of a “data storage provider”, they will, in the data protection context, be appointing a processor and must ensure that an appropriate agreement is in place between them and the data storage provider. Note also that the data protection clauses as written do not allow for the transfer of personal data outside of the UK (or, optionally, the EEA). This will be an important factor to consider if the recipient wishes to store information in the cloud.
Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.
This Confidentiality and Non-Dealing Agreement template contains the following clauses:
1. Definitions and Interpretation
2. Confidential Information
3. Receiving Party’s Confidentiality Obligations
4. Storage of Confidential Information
5. Permitted Disclosure
6. Mandatory Disclosure
7. [Disclosure of Personal Data – Personal Data Sharing]
8. [Disclosure of Personal Data – Personal Data Processing]
9. Proprietary Rights
10. Exceptions to Non-Disclosure and Confidentiality
11. [Customers] OR [Clients] and Non-Dealing
14. Enforcement and Indemnity
15. No Further Obligation
16. No Partnership or Agency
17. Non-Assignment of Agreement
18. Entire Agreement
20. No Waiver
23. Third Party Rights
24. Law and Jurisdiction
and the following schedules:
1. The Confidential Information
2. The Services
3. [Personal Data [Sharing] OR [Processing]
4. [The Territory]
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