Confidentiality Agreement Governing Law

9. Limited liability, etc. – Most business agreements contain provisions that the liability of the parties is limited in different ways. Not all of these restrictions are present in an NDA. For example, in the event of abuse of the confidential information of the disclosed person, the depositor would expect compensation for consequential damages. Limited liability provisions should therefore be carefully examined. For example, California law prohibits competition clauses and maintains this prohibition, even though the NDA establishes another state as the relevant jurisdiction as long as the state chosen in the agreement does not have an actual relationship with either party. Exclusive jurisdiction implies that the parties do not want any court or law other than what is stated in the NDA to be involved. Other jurisdictions that are not mentioned in the agreement are more likely to accept jurisdiction where there is exclusive jurisdiction mentioned in the agreement.

Although the courts normally consider the location of the parties as a starting point, other factors influencing the outcome, where the parties` registered office is located, where the contract was performed, where the agreement should be applied geographically, are applicable international laws, etc. Several states have passed new laws limiting the use of confidentiality agreements (NSAs), so it is timely for companies to review their policies and practices. Below are some general « best practices » regarding NDSAs. The duration of confidentiality obligations should depend on the nature of the information disclosed, whether it remains a trade secret for a long time or is no longer secret or valuable after a certain period of time. Confidentiality obligations may be maintained even after the termination of the relationship by the parties. However, since the protection of information can be costly and burdensome, parties should avoid accepting an unnecessarily long period of protection. A court that is not explicitly mentioned in the NDA should verify whether it has jurisdiction in the matter by checking whether it has a connection with the parties or the agreement in question. This is due to the fact that the disclosing party is normally the one who insists on the NDA agreement, who pays for the design and elaboration of the agreement and gets the first choice of jurisdiction. .

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