The International Confidentiality Agreement between companies is intended to safeguard certain sensitive information (i.e. commercial or technological secrets, financial details), which may be discussed during negotiation process between companies from different countries. It is typically used in negotiations taking place prior to making distribution, technological transfer, licence, franchise, manufacturing, joint venture, mergers and acquisitions agreements, and for any other business agreement, which might require prior exchange of sensitive or confidential information.
The Parties are required to maintain confidentiality both during the negotiation process and also during a subsequent period that should be established in the Agreement. The goal of this type of agreement is to ensure that the other Party does not benefit from information received or to prevent the aforesaid information from being conveyed to the competition in the event that negotiations fail.
This Agreement can be used to safeguard confidential information in both international and domestic transactions
Parties Clauses
- The object of the Agreement
- Confidential Information
- Obligation of the Parties
- Exceptions from confidentiality obligations
- Protection of personal data
- Coming into force and duration of Agreement
- Delivery of Confidential Information
- Notifications
- Law applicable and jurisdiction
- Language
Sample of Content
DATE: …………………
BY AND BETWEEN:
…………………. [company name], with registered address at ……… [address, town/city and country]
and identification/tax record number …………………, represented by
…………………………………………. [surname and first name, position] (hereinafter, “Company A”),
AND:
…………………. [company name], with registered address at ………………… [address, town/city and
country] and identification/tax record number ………………….., represented by
……………………………………………… [surname and first name, position] (hereinafter, “Company B”),
The two parties mutually acknowledge that they have sufficient legal capacity to enter into
this Confidentiality Agreement, and declare the following:
- Company A is a company with ………….. nationality, which has far-reaching experience in
the ………………. sector, and whose core activity is …………………………………………
- Company B is a company with ………….. nationality, which has far-reaching experience in
the ………………. sector, and whose core activity is…………………………………………
III. Presently, the two Parties are engaged upon a negotiation process, the final
purpose of which is to ………………………………………………………………….. [describe the
object of the negotiations: to establish a purchase/sale or supply agreement; to
establish a distribution, franchise, licence or technological transfer agreement; create
a joint venture; mergers and acquisitions; etc.].
- That during the aforesaid negotiations, the two Parties will have to exchange sensitive
and confidential information.
- The parties wish to regulate the way in which the aforesaid confidential information
will be handled.
- That taking into account the considerations above, the Parties have agreed to
enter into this Confidentiality Agreement (hereinafter, “the Agreement”), which will
be subject to the following.
CLAUSES
- OBJECT OF THE AGREEMENT
The Parties agree that within the framework of the negotiations which are being carried out,
there is a need to store certain information or data relating to the negotiations and the
object thereof (hereinafter, “Confidential Information”) which will have to be kept secret,
in other words, be kept confidential, by each one of the Parties, in accordance wi th the
terms and conditions of this Agreement.
- CONFIDENTIAL INFORMATION
For the purposes of this Agreement, Confidential Information shall be considered to be any
information which could possibly be disclosed in speech, in writing or by means of any other
tangible or intangible medium or format, currently known or which could be invented in the
future, exchanged between the Parties as a result of this Agreement, and which either one of
the Parties might consider to be confidential and might so convey it to the other Party.
[Optional paragraph] Attached hereto as Annex 1 of this Agreement, the Parties have
included a “List of Confidential Information Elements” which shall be disclosed to the other
Party, following the signing of this Agreement. Subsequently, the Parties will be able to add
other Confidential Information Elements to the aforesaid list, and such elements shall also
be considered thus for the purposes of the object of this Agreement.
- OBLIGATION OF THE PARTIES
The Parties undertake to adopt the appropriate measures to ensure that the Confidential
Information is handled confidentially. The aforesaid measures shall not be less thorough than
those applied by the Parties to their own Confidential Information, and shall consist of…
Some Tips
Contracts drafted by the legal experts of Global Negotiator cover all relevant aspects that are
negotiated and agreed in the different types of business between companies. However, when
these contracts are used you should take into account some recommendations common to all
of them that are described in this User Guide.
DATE
The date when the contract comes into force is the one that appears in its header, as mentioned
in the final paragraphs of the contract, before signatures (This Contract comes into force on the
date written above).
In some contracts -for example in the Supply Contract- the date of coming into force is also
mentioned in one of the clauses. In these cases you have to verify that the two dates inserted in
the contract (in the heading and in the corresponding clause) are the same, in order to avoid
discrepancies.
PARTIES
Be sure to insert in the first page of the contract the full details of the Parties:
- When a Party is a company you must insert the following information: legal name, legal form
(limited, incorporated, etc.), full address, registration data and fiscal identification number.
- When a Party is an individual that works as independent professional (for example a
commercial agent) you must insert the following information: full name, profession, full
address and fiscal identification number.
CLAUSES
Clauses with different alternatives: choose the most favorable
In the most important clauses of each contract (exclusivity, payment terms, applicable law and
competent jurisdiction, etc.) several drafting alternatives are proposed so you can choose the
most appropriate to each situation. Therefore, the user before submitting the contract to the
other Party must choose the alternatives that seem best suited to their interests, and eliminate
the rest.
Clauses with blank spaces to be completed
In several clauses of the contract blank spaces appear with dots (…………………..) that the user
has to complete inserting text. Following the dots, between brackets, you will see the data and
explanations to insert the text.
- When the text between brackets is in normal letters (the same as the contract) and
separated by “,” or the word “o”, the user must insert one of the options suggested.
Example of blank space (……..) with options to select between brackets:
Orders handled before completion of the present Contract which produce sales transactions
within ………. [1, 2, 3, 6] months shall entitle the Agent to receive the corresponding commission.
In this case the user must choose between options 1, 2, 3 or 6 months and insert one in the blank
space (……..).
- When the text between brackets is in italics the user has to insert the data and information
requested and eliminate the bracketed text.
Example of blank space – (………) to insert text:
Both parties, by mutual consent, resolve to refer any dispute to the Rules of Conciliation and
Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in
accordance with said Rules. The place of arbitration shall be ……….. [city and country]. In this
case the user must insert in the blank space (………..) the city and country chosen to conduct the
arbitration and afterwards eliminate the bracketed text [city and country].
Notices Clause
Sometimes it may happen that the official address of the Parties which appear at the beginning
of the contract is different from which is to be used for communications between the Parties
during the terms of the contract. In this case the user should include at the end of the contract
a Notices Clause.
Example of Notices Clause:
Notices. – In order to comply with their contractual obligations, the Parties establish the
following address for the provision of notices related to this contract:
– Party 1 ……………………………………………………. [insert full address].
– Party 2 ……………………………………………………. [insert full address].
ANNEXES
The contracts incorporate some Annexes, each of them, referenced to the corresponding Clause.
Annexes are drafted in commonly used formats, although the user must adapt these formats
and the text inserted in them to each particular situation.
SIGNATURES
People who sign
Persons signing the contract on behalf of the company must have the authority to do so and
preferably, be entitled on the basis of a power of attorney. Below the signature, in addition to
the full name of the person that signs his/her position must be inserted. When one of the Parties
who signs is a natural person (for example a commercial agent in an Agency Contract) obviously
he or she is the person that has to sign the contract.
The laws of some countries require that contracts, to be valid, shall be signed in front of
witnesses or a public notary. Therefore, before signing a contract you should be informed about
the requirements that may exist in each country.
Place and date of signature
Usually contracts are signed by both Parties on the same date and place. Nevertheless, in
international contracts, due to physical distance, it is common that each of the Parties sign in
different dates and places. This contract provides for both alternatives so it comes to choosing
the most appropriate to each situation.
Number of copies
Usually, the Parties sign two copies of the contract, each Party retaining one of them, but can
also arise the need to sign more copies. In this case all you have to do is mention explicitly the
number of copies to be signed in the paragraph that is included at the end of the contract (Both
Parties declare their conformity to the present contract, which is signed in …… copies, each of
which shall be considered an original).
GENERAL RECOMMENDATIONS
The Parties must sign all pages of the contract, including Annexes, so they are also valid. It is
better to use ball point or pen (not pencil) in a color other than black (e.g.: blue); this makes it
easier to distinguish an original document from a photocopy.
It is preferable (although no mandatory) to express sums of money and percentages in words
and figures. Of course, the words and figures for a given amount must match exactly. You also
must insert the currency in which the amounts are expressed. It is advisable to use the rules
establish by ISO that name each currency by three capital letters (EUR for euro, USD for dollar,
GBP for sterling pound, JPY for Japanese yen, etc. – you can get the acronyms of every currency
in the website www.oanda.com).
Once you have chosen the best alternatives of each clause and have completed the blank spaces
you should revise the whole contract to remove remaining paragraphs and correct any errors.