It is not uncom­mon to see very detailed def­i­n­i­tions of con­fi­den­tial infor­ma­tion and then a very fun­da­men­tal use/disclosure pro­vi­sion that almost null and neas the pur­pose of the NDA. One of the main fea­tures of an NDA is a spe­cif­ic descrip­tion of the pur­pos­es for which con­fi­den­tial pur­pos­es may be used, cou­pled with a gen­er­al pro­hi­bi­tion on using it for pur­pos­es oth­er than those pre­scribed, in order to pre­vent the receiv­ing par­ty from using valu­able con­fi­den­tial infor­ma­tion inap­pro­pri­ate­ly. Typ­i­cal uses of con­fi­den­tial infor­ma­tion may be: imple­men­ta­tion of cer­tain pro­fes­sion­al ser­vices (e.g. B engi­neer­ing, soft­ware needs analy­sis, man­age­ment con­sult­ing); the imple­men­ta­tion of due dili­gence of an acqui­si­tion tar­get com­pa­ny; exam­i­na­tion of the terms of a poten­tial joint ven­ture or oth­er busi­ness oppor­tu­ni­ty; etc. It should also be tak­en to define who can obtain con­fi­den­tial infor­ma­tion with a view to pro­mot­ing the autho­rised or stat­ed pur­pose. It is often nec­es­sary to pass on infor­ma­tion to pro­fes­sion­al employ­ees or con­sul­tants (or even fund­ing sources, relat­ed com­pa­nies or spon­sors, etc.), but this should be con­sid­ered on a case-by-case basis. Ide­al­ly, these recip­i­ents are iden­ti­fied by name, but they should be iden­ti­fied at least by class and always on a “need to know” basis. The par­ties should be aware of the con­fi­den­tial­i­ty oblig­a­tions that must be imposed on such third par­ties as a pre­con­di­tion for the receipt of con­fi­den­tial infor­ma­tion. Staff may be sub­ject to con­fi­den­tial­i­ty oblig­a­tions as part of their employ­ment con­tracts. There are cer­tain ways to han­dle dis­clo­sure to pro­fes­sion­al con­sul­tants: a) they might be invit­ed to become a par­ty to an NDA, b) they may sim­ply agree to keep infor­ma­tion con­fi­den­tial, or c) the par­ties may sim­ply rely on con­fi­den­tial­i­ty oblig­a­tions imposed on them by their pro­fes­sion­al organization.

Par­ties to the infor­ma­tion should endeav­our to ensure that the receiv­ing par­ty takes respon­si­bil­i­ty for breach­es of con­fi­den­tial­i­ty com­mit­ted by employ­ees, con­sul­tants, relat­ed com­pa­nies and oth­er nec­es­sary recip­i­ents, although such request may be strong­ly reject­ed by the receiv­ing par­ty. It‘s not real­ly a bat­tle­field there, but we all feel the pinch of com­pe­ti­tion from time to time. The strate­gies we rely on to pro­tect our assets reflect the lev­el of com­pe­ti­tion and our refine­ment in the man­age­ment of these assets.…