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CONTRACTS

What does a confidentiality clause in a contract cover?

SHORT ANSWER

It obligates you to protect the other party’s designated information — inside a broader contract rather than a standalone NDA. Check what counts as confidential, the standard exclusions, and how long the duty lasts.

Most business contracts embed a confidentiality section doing the work of an NDA within the larger deal. The anatomy to check: the definition of confidential information (marked-only? everything disclosed? — broader definitions mean heavier obligations), the standard exclusions that should always appear (information already public, already known to you, independently developed, or received lawfully from others), permitted disclosures (to employees, advisors, or as legally compelled — ideally with notice), and duration (a term of years for ordinary information; longer or indefinite only for true trade secrets). Missing exclusions are the red flag — without them, you can be liable for "disclosing" things the whole world already knows.

What to do, in order

  1. Read the definition of what counts as confidential.
  2. Verify the four standard exclusions are present.
  3. Check permitted disclosures — advisors, legal compulsion with notice.
  4. Note duration — indefinite terms deserve scrutiny beyond trade secrets.
  5. Confirm obligations are mutual if both sides share information.

Common questions

What exclusions should a confidentiality clause have?

Public information, information you already knew, independently developed information, and information lawfully received from third parties — their absence makes the clause overreach.

How long should confidentiality obligations last?

Commonly 2–5 years for ordinary business information; true trade secrets can justify indefinite protection. Indefinite terms for everything is a red flag.

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