Compelled Disclosure
Contract Type:
NDA-finance
Jurisdiction:
Compelled Disclosure: The Receiving Party may disclose Confidential Information of the Disclosing Party if it is compelled by law to do so, provided the Receiving Party gives the Disclosing Party prior notice of the compelled disclosure (to the extent legally permitted) and reasonable assistance, at the Disclosing Party's cost, if the Disclosing Party wishes to contest the disclosure.
Explanation
This clause allows confidential information to be disclosed if legally required, with conditions:
- The receiving party can disclose confidential information if compelled by law.
- They must notify the disclosing party beforehand when possible.
- They must reasonably assist the disclosing party in contesting the disclosure, at the disclosing party's expense.
In plain terms, it permits confidential data to be disclosed under legal mandate, provided the other party is notified and supported in challenging it if they want.
Historically, confidentiality agreements lacked exceptions for legally compelled disclosures.
This created conflicts when legal orders demanded revealing sensitive information.
As confidential dealings grew more complex, situations emerged where parties faced demands to disclose data under subpoena or regulatory mandate. Refusing risked sanctions.
Compelled disclosure clauses emerged allowing the release of confidential information under legal orders. This aimed to excuse liability for disclosures required by law.
Provisions requiring notification and assistance supported parties resisting improper compelled orders. The disclosing party could fight the demand or seek protective measures with the receiver's help.
Over time, tailored compelled disclosure clauses became vital in balancing confidential duties with legal obligations. They empowered parties to satisfy lawful orders while opposing improper disclosures.
In effect, compelled disclosure exceptions developed to release parties from confidentiality when the law necessitated it. Procedural assistance requirements enabled challenging unjustified revelations.
This calibrated approach aimed to facilitate lawful disclosures while protecting sensitive information.
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