Confidentiality Clauses: Some Tips For A Valid And Effective Clause

• Published date: 10 March 2023
• Subject Matter: Litigation, Mediation & Arbitration, Disclosure & Electronic Discovery & Privilege
• Law Firm: Lydian
• Author: Ms Pauline Hellemans

Following a recently published decision of the Court of Cassation regarding the duration of confidentiality clauses, ¹ the Commercial & Litigation team provides you with some tips on confidentiality clauses below. Indeed, many agreements contain a confidentiality clause. However, a number of things must be taken into account for such a clause to be valid and effective.

WHAT IS A CONFIDENTIALITY CLAUSE?

Confidentiality clauses aim to protect confidential information shared by the parties in the context of concluding and performing the agreement. The party obtaining the confidential information undertakes to treat it as confidential, not to communicate it to third parties and not to use it for purposes other than the performance of the agreement.

WRITTEN CLAUSE REQUIRED?

Case law recognizes the existence of an implicit confidentiality commitment for the activities of certain professional groups (e.g. bankers, company directors). However, in order to ensure greater certainty, we recommend that even in these cases an explicit and written confidentiality clause should always be included in contracts. Moreover, this allows the clause to be modulated.

UNILATERAL OR RECIPROCAL?

You will regularly be faced with business partners who wish to impose a unilateral confidentiality clause on you to protect the information to be provided by them. Always ask yourself whether, within the framework of the agreement, you yourself will not also transmit confidential information to the other party. If so, you should insist on a mutual confidentiality clause that protects the information exchanged by both parties.

WHAT INFORMATION SHOULD BE KEPT CONFIDENTIAL?

The parties should clearly define what information must be kept confidential. The clause can include information that existed prior to the conclusion of the agreement, as well as information exchanged or developed during the term of the agreement. Furthermore, the existence of the agreement and the content of that agreement may also be confidential. A confidentiality clause best specifies what information must be kept confidential. For example, it is not always required that the existence of the agreement itself must be kept confidential (e.g., in the case of a collaboration that is made public).

On the one hand, the information to be kept confidential can be described concretely through a detailed list in the clause. On the other hand, if the parties do not yet have a complete picture of the information that will be...