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Companies enter into non-disclosure agreements (NDAs) for a variety of reasons, which includes discussions with the intention of collaborating in the future. Regardless of the reason for entering into an NDA, boilerplate clauses should be included to adequately protect the disclosing party through dictating the mechanics and legal aspects of the agreement. Here Greenaway Scott considers 5 key boilerplate clauses to include in all NDAs.
1 – Entire agreement
It is advisable to include an entire agreement clause as it dictates that only the information within the NDA is binding, regardless of previous discussions. This means the NDA supersedes any previous agreements, whether written or oral. In addition, both parties gain protection against misrepresentation from previous discussions as it ensures only statements included in the NDA can be relied upon. This in turn provides certainty and clarity to the agreement.
2 – Severance
This clause outlines that if a specific provision in the NDA becomes illegal, unenforceable or invalid the whole of the agreement can continue to be binding and valid by severing the illegal or invalid clause from the agreement. This allows a contract to continue unaffected, rather than terminating because of one problem clause.
3 – Third Party Rights
It is important to include a clause that states that the NDA does not give rise to any third party rights from the Contracts (Rights of Third Parties) Act 1999 to enforce any term of the NDA. This ensures that only parties who enter into the agreement can claim rights under it.
4 – Waivers
This clause is vital for ensuring that a party retains any right or remedy under the agreement or by law regardless if there is a delay in exercising it. This means that a party that does not promptly exercise these rights still has the ability to should they choose to do so.
5 – Governing Law and Jurisdiction
When you are entering agreements with companies based in different countries, this clause is vital to deal with any disputes that may arise. The preference is to have the governing law and jurisdiction in England and Wales if your company is based in either country. This will reduce costs and ensure an easier process if a claim is brought.
Please note this is not an exclusive list but includes key boilerplate clauses to include in an NDA.
The information contained in this article is for information purposes only and is not intended to constitute legal advice. If you require further information our commercial team would be more than happy to assist you.