Confidentiality & Exclusions
Contract Type:
Generic Contract
Jurisdiction:
Each party shall keep confidential all information (written or oral) concerning the business and affairs of the other party that it shall have obtained or received as a result of the discussions leading up to or the entering into or performance of this Agreement. The obligations of confidentiality under this clause shall not apply to: (a) any information that is in the public domain other than through a breach of this clause; (b) any information that a party is required to disclose by law, rule, regulation or regulatory authority; (c) any information that is lawfully received by the receiving party from a third party without breach of any obligation of confidentiality; (d) any information that was already in the receiving party's possession prior to disclosure by the disclosing party; (e) any information that is independently developed by the receiving party without access to or use of the disclosing party's information; or (f) is approved for release in writing by the disclosing party. In all other respects, the obligations of confidentiality under this clause shall survive the termination of this Agreement."
Explanation
Here is a plain English explanation of the Confidentiality & Exclusions clause:
This clause requires both parties to keep confidential any business information they obtain from the other party because of the negotiations, contract agreement, or performance of the contract.
However, there are some exceptions where the confidentiality obligations do not apply:
- Information already public through no breach
- Information that must be disclosed by law
- Information received legally from a third party without confidentiality duties
- Information the receiving party already possessed
- Information independently developed by the receiving party
- Information approved for release in writing by the discloser
In summary, this imposes a mutual confidentiality obligation on business information exchanged, but with reasonable exclusions to avoid overbroad protection.
The confidentiality duties remain even after the contract ends.
The confidentiality and exclusions clause has its origins in common law duties of confidentiality that emerged in the 19th century.
Key aspects of its development include:
Courts recognized implied confidentiality obligations when sensitive information was shared in certain fiduciary, business and employment relationships. This formed the basis for protecting trade secrets. But the scope of protected information was uncertain.
In the early 20th century, contracts began to expressly define confidential information and carve out exclusions. This increased certainty and prevented overbroad confidentiality burdens.
Standard exclusions arose for information in the public domain, required legal disclosures, third party sourcing and prior possession. Courts generally recognized these as reasonable limits.
Allowing discloser approval for selective release became an accepted qualification. It prevented blanket restrictions on sharing.
Over time, confidentiality clauses became highly customized by industry and technology to balance protection against stifling information use.
Modern confidentiality contracts combine express duties with customary exclusions to provide clear, right-sized protection. The obligations generally survive contract termination.
In summary, confidentiality clauses evolved from common law origins to define scope through exclusions, while retaining flexibility - balancing confidentiality against information use.
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