Frequently asked legal questions
The FALQs on this page have been drafted on the basis of 'one way' disclosure of information from a Discloser to a Confidant. The Cleardocs Confidentiality Agreement (Deed) also allows for 'two way', or mutual disclosure of information. In this situation, the terms 'Discloser' and 'Confidant' may be replaced with 'the parties' or 'the party' (as appropriate): the Discloser is the party disclosing confidential information and the Confidant is the party who receives confidential information.
When do the Confidant's confidentiality obligations commence?
The Confidant's confidentiality obligations commence on the earlier of:
- the date on which the Confidant signs the Deed of Confidentiality; and
- the date on which the Confidant received any confidential information.
When do the Confidant's confidentiality obligations end?
The Confidant's obligations continue up until the later of:
- 20 years from the date of the Deed; or
- the duration of the purpose for which the information is disclosed to the Confidant.
The confidentiality period in the Deed is set by 'cascading' periods of 20 years and less. The 'cascading' periods are 20 years, 10 years, 5 years and 3 years. These time periods are intended to preserve the enforceability of the clause by allowing for less restrictive periods of confidentiality, if a court finds that one of the longer periods is unenforceable.
Can the Confidant disclose the confidential information to its employees or personnel?
Yes, the Confidant may permit its directors, officers, employees, agents, nominees, contractors, consultants or advisors (Personnel) to access the confidential information the subject of the Deed of Confidentiality (or any part of it). However it may only do so to the extent that such disclosure is necessary for the purpose for which the Deed is entered into.
Also, if the Discloser requests, the Confidant must procure that its Personnel execute a deed in favour of the Discloser on the same terms and conditions as the Deed of Confidentiality.
Can the Confidant make copies of the confidential information?
The Confidant may only copy the confidential information if it is strictly necessary for the purpose for which the information was disclosed.
At the conclusion of the purpose, or within 7 days after the Discloser requests, the Confidant must:
- deliver to the Discloser any copies of documents in its possession containing the confidential information; and
- destroy all electronic copies of the documents or any confidential information on its system.
What happens if the Confidant breaches its obligations under the Deed of Confidentiality and passes that confidential information on to another person?
If the Confidant breaches its obligations under the Deed of Confidentiality (for example, by passing that confidential information on to another person), then the Confidant is liable to the Discloser, and indemnifies the Discloser, for any damage or loss which the Discloser incurs directly or indirectly because of the breach.
Can the Discloser or the Confidant be a trustee of a trust?
Yes, both the Confidant and Discloser may enter into the Deed of Confidentiality in their capacity as trustee of a trust. They may do so only on the basis that they have the right to be fully indemnified out of the trust assets in respect of all the obligations and liabilities they incur under the Deed of Confidentiality.
Under what circumstances can the Confidant disclose any of the confidential information without breaching its obligations under the Deed of Confidentiality?
The Confidant may make disclosures which are required by any applicable law or legally binding order of any:
- government authority;
- commission; or
- tribunal acting within its powers.
When the Confidant discloses confidential information in one of the above circumstances, it must seek to limit the degree of disclosure which it provides and notify the Discloser.
Does the Confidant provide any comfort to the Discloser that it has complied with the Deed?
If the Discloser makes a written request of the Confidant, then the Confidant must, within 7 days of receiving such request, provide a written statement to the Discloser which is either:
- in the form set out in the schedule to the Cleardocs Deed of Confidentiality (Compliance Statement). By providing the Compliance
- confirms that it has complied with its obligations under the Deed, including the delivery and destruction of documents;
- undertakes to, in relation to any breach of which the Confidant later becomes aware:
- notify the Discloser as soon as possible but in any event within 2 days; and
- take all necessary actions, at its own expense, to ensure its breach is rectified to the extent possible; and
- acknowledges that the Deed continues to bind it even after it returns or destroys all documents as required by the Deed; or
- in some other form approved by the Discloser.
Is the Confidentiality Agreement (Deed) package suitable for when there are multiple Disclosers?
Yes, but only where the two parties to the Deed are making disclosures (mutual disclosure).
The Cleardocs Confidentiality Agreement (Deed) can only be used for two parties. It is suitable for when either one party (one way disclosure) or both parties (mutual disclosure) to the Deed are disclosers. You can nominate on the question interface which situation applies to you and we will tailor the Deed to your circumstances.
The Cleardocs Confidentiality Agreement (Deed) is not suitable where there are two (or more) disclosers who disclose confidential information to a third party confidant. In this situation, Maddocks recommends that you create a separate deed for each discloser.
Is the Confidentiality Agreement (Deed) package suitable for when there are multiple Confidants?
Yes, but only where the two parties to the Deed are receiving disclosures (mutual disclosure).
The Cleardocs Confidentiality Agreement (Deed) can only be used for two parties. It is suitable for one way or mutual disclosures of information, that is, where both parties disclose and receive confidential information.
The Cleardocs Confidentiality Agreement (Deed) is not suitable where there are two (or more) confidants who are receiving confidential information from a third party discloser. In this situation, Maddocks recommends that you create a separate Deed to bind each confidant.
One reason for this is, the commencement of the Confidentiality Period for each confidant may differ as the confidential information may be disclosed to some confidants before others. There may also be variations in the purpose for which the confidential information is disclosed.
Deed of Confidentiality or Confidentiality Agreement?
Parties commonly protect disclosures of confidential information through a Deed of Confidentiality. Other legal contracts such as a Confidentiality Agreement or Non-disclosure Agreement may also be suitable.
The terms of a Deed of Confidentiality and Confidentiality Agreement are generally the same although there are differences at law between a deed and an agreement. For example, unlike an agreement, a deed binds each party even if it does not require a party to pay money to the other party. If you are unsure which document to use, you should seek legal advice.