One of the main features of an NDA is a specific description of the purposes for which confidential purposes may be used, coupled with a general prohibition on using it for purposes other than those prescribed, in order to prevent the receiving party from using valuable confidential information inappropriately. Typical uses of confidential information may be: implementation of certain professional services (e.g. B engineering, software needs analysis, management consulting); the implementation of due diligence of an acquisition target company; examination of the terms of a potential joint venture or other business opportunity; etc. The need for strict privacy arrangements was highlighted in the environmental product liability dispute, which culminated last week with a $US 236 million judgment against ExxonMobil. One of the applicant`s main witnesses was an expert who had previously worked as counsel to a defendant on projects directly relevant to the issues of the dispute and related to the defendant`s confidential information. The defendant did not require a confidentiality agreement from counsel during the project. The defendant attempted to prevent the complainant from having the expert in the complaint against him, but the court rejected the defendant`s request, largely due to the lack of a confidentiality agreement with the counsel. If the defendant had been genuinely interested in keeping the information confidential, the Court argued that it would have expressed its expectations in writing to the counsellor by inserting a confidentiality clause in the consulting contract. Parties should also consider how long the information should remain confidential. From the receiving party`s perspective, well-formulated NDAs should: (a) address the consequences of a breach of confidentiality, which may vary depending on whether the breach was intentional, negligent or through no fault of the injuring party; (b) expressly preserve the right of the disclosing party to seek appropriate remedies by recognizing that an offence may cause irreparable damage that cannot be adequately compensated by damages; and (c) include compensation for loss or damage (including claims of third parties) resulting from the breach. . .
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