Term and Termination

NDA

Term and Termination

In addition to fixing a specific window of time in which confidentiality requirements and non-use restrictions apply, the parties can also negotiate when such a window or period starts and when it expires.

Start of the Confidentiality Period

At the Effective Date

Exemplar N25-1

This Agreement is effective as of the Effective Date and shall be terminated upon the earlier of: (i) two years after the Effective Date; or (ii) either party’s written notice to the other party.

Upon Disclosure

In the following exemplar, the confidentiality period starts on the date of first disclosure, which may be prior to the effective date of the NDA:

Exemplar N25-2

The obligations undertaken under this Agreement shall be effective retroactively to the date any Information was first disclosed, made available or provided by a disclosing party to the receiving party. This Agreement contains the entire understanding to date between the parties hereto relative to the confidentiality of the Information. This Agreement may not be amended or supplemented except in a writing signed by all parties hereto.

Upon Receipt

In the following exemplar, the confidentiality period commences when the information is received by the receiving party:

Exemplar N25-3

The confidentiality obligations of each Party under this Agreement will survive any expiration or termination of this Agreement for a period of three years after receipt of such Confidential Information, or such time as may be required by federal or state law or regulations, whichever shall last occur.

In the following exemplar, the parties agree to a 2-year disclosure period that commences upon the effective date, and a 3-year confidentiality period that commences upon receipt:

Exemplar N25-4

This Agreement shall govern disclosures between the Parties for two (2) years after the Effective Date. The Receiving Party shall protect Confidential Information, in the manner provided herein, for three (3) years after receipt thereof, unless such obligation ceases earlier pursuant to this Agreement.

End of the Confidentiality Term

From the Date of Last Disclosure

One disadvantage of using a confidentiality term that terminates upon expiration of a finite period that starts from a fixed date is that information disclosed in the latter part of such term will not have the same period of protection that applies to information disclosed at the beginning of the term. To make the point, if the protection period is 3 years from the effective date of the NDA, then information disclosed on the effective date will enjoy the full 3-year protection period. By contrast, if a party makes a disclosure after 2.5 years from the effective date, then that information will only be protected for half a year. A solution to this untoward result would be to fix the expiration date as a function of the date of disclosure:

Exemplar N25-5

The obligations set forth in this Agreement shall be binding for a period of two (2) years from the date of disclosure of Confidential Information. Such obligations shall survive the termination or expiration of this Agreement.

Exemplar N25-6

This Agreement will remain in effect for a period of five (5) years from the date of last disclosure of Confidential Information by either party, at which time it will terminate.

No Specified Confidentiality Period

Depending on the circumstances, a fixed, specific, definite, or finite confidentiality term may not be appropriate, and the parties may instead wish to require compliance with the applicable confidentiality requirements and non-use restrictions for as long as the disclosed information is protectable under the NDA or applicable law:

Exemplar N25-7

This Agreement shall terminate three (3) years from the Effective Date, but may be terminated by either party giving thirty (30) days written notice to the other party. The obligations stated herein shall remain in effect indefinitely until the Discloser makes Confidential Information available to the public or until such Confidential Information is no longer protected under applicable law.

Special Confidentiality Periods

Issues relating to sensitive types of protected information are addressed elsewhere on this site (e.g., Code [N4D], Personal Information [N19], and Trade Secrets [N26A]). Regarding the specific issue of confidentiality periods applicable to such sensitive types of information, these categories of information usually require a longer (sometimes indefinite) or non-fixed period:

Exemplar N25-8

The Receiving Party shall protect Confidential Information, in the manner provided herein, for three (3) years after receipt thereof (except for source code, which shall be kept in confidence pursuant to this Agreement in perpetuity), unless such obligation ceases earlier pursuant to this Agreement.

Exemplar N25-9

Receiving Party’s obligations with respect to confidentiality and use shall (i) continue indefinitely for Non-Public Personal Information and (ii) expire three (3) years from the last date of disclosure of other Confidential Information. “Non-Public Personal Information” means nonpublic or personally identifiable information about employees or other individuals other than business contact information.

Exemplar N25-10

Each party’s obligations under this Agreement of non-disclosure and non-use of Confidential Information shall survive termination of this Agreement for a period of two (2) years from termination of this Agreement. Notwithstanding the foregoing: (i) if the Confidential Information is a trade secret, the Receiving Party’s obligation of non-disclosure and non-use shall continue as long as such Confidential Information is a trade secret; and (ii) the Receiving Party’s obligation of non-disclosure and non-use of Personal Information shall continue indefinitely. Additional provisions of this Agreement that contain obligations that continue beyond the performance of this Agreement shall survive termination of this Agreement.

CC

Term and Termination

NDA

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