I'm a contractor and have come to familiarise myself with the standard wording that comes with most NDAs. I perform contract programming work for companies overseas and access their IP to perform my services (bug fixes, feature adds, etc).

However, I'm not 100% clear on the interpretation of a the following section.

Purpose. In furtherance of the purpose or purposes stated below, the Company may disclose its Confidential Information to Recipient. This Agreement is intended to bind Recipient and prevent it from disclosing the Confidential Information as herein provided or from using the Confidential Information for purposes other than considering whether to enter into a contractual business relationship, including but not limited to a potential investment transaction (the “Permitted Purpose”).

Usually, the purpose is much wider than this. It'll include things like offering my services, or performing designated tasks. From my interpretation above, I'm only allowed to use their IP for "considering whether to enter into a contractual business relationship", which doesn't seem to fit the end goal of my services at all. If I sign this, I still don't have access to their IP to offer my services.

The "including but not limited to a potential investment transaction" doesn't seem to apply to me, because I'm not an investor. It seems like this NDA is more likely designed to be signed by potential investors than contractors.

Especially since later on in the contract,

Recipient further agrees not to use the Confidential Information provided to it by the Company for any purposes other than the Permitted Purpose.

Naturally, I'm going to bring this up with the client before I sign, but I thought I'd also enquire here. My question is as follows:

Is my interpretation of this wording correct, or is there scope within this wording that does allow for my services within the Permitted Purpose?

If it's relevant, this contract was supplied by a company based in California, USA.

1 Answer 1


That wording is designed for the case where Recipient (potential contractor) considers but does not thereafter sign contract for the actual work.

If you decide to work for them, the contract for services will have its own non-disclosure provisions and the NDA will be superseded / not relevant anymore.

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