Permitted Disclosures Clause

What This Clause Does

Even under a strict NDA, there are situations where you need to share information with others — your lawyer, accountant, or employees who need to know. The permitted disclosures clause defines exactly when this is allowed and under what conditions.

You should also have an exception allowing you to disclose information if legally compelled to do so (by a court order or government investigation). Without this exception, the NDA could put you in the impossible position of violating either the NDA or the law.

What This Looks Like in a Contract

"Receiving Party may disclose Confidential Information to its employees and contractors who (i) have a need to know such information, and (ii) are bound by confidentiality obligations no less restrictive than those in this Agreement. Receiving Party may also disclose as required by law, provided it gives Disclosing Party prompt notice and cooperates with any protective order request."

Red Flags to Watch For

• No exception for legally compelled disclosures
• Employees and contractors who receive information are not required to be bound by confidentiality
• No provision for giving notice before a legally required disclosure
• Exception for legal advisors requires prior written approval from the disclosing party

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