Can a person be held responsible for a breach of contract by another person?

Question

I once worked as a contractor for a certain company. That company required me to sign an agreement that contained the following:

5.2. Protection of Confidential Information. Contractor shall not use Confidential Information for any purpose whatsoever or in any manner whatsoever except for the sole purpose of performing this Agreement. All Confidential Information shall be kept confidential; provided, however, that (i) Contractor may disclose Confidential Information to [Company]’s own employees and contract team members (“Authorized Persons”) who need to know such information in order to accomplish the purpose for which [Company] has disclosed the Confidential Information, it being understood that such Authorized Persons shall be informed of the confidential nature of such information, shall be directed to treat such information confidentially, and that Contractor shall be responsible for any breach of this Agreement by such Authorized Persons, and (ii) any disclosure of Confidential Information may be made after [Company] consents in writing in advance of disclosure. Contractor agrees to take any and all reasonable measures to prevent any unauthorized use, disclosure, publication, or dissemination of Confidential Information to anyone other than Authorized Persons, but in no event less than the level of protection that Contractor gives to its own confidential information. Contractor agrees not to otherwise use Confidential Information for its own benefit or for the benefit of any third party.

My question is regarding the bolded text. I pointed it out to the CEO, and he agreed to remove it before I signed the agreement. But what if that clause had not been removed? Would it be enforceable, given that I cannot control what other people do?

Answer 1

I believe what the original text meant to say was this:

1. Contract team members ("Authorized Persons") are deemed to be your subcontractors or employees; and
2. If your people do something wrong with Confidential Information, you will be responsible (vicarious liability).

However, the wording used in the clause is not particularly literate in legal terms:

• It is not clear as to whether Authorized Persons are in fact your people, as opposed to just other contractors like yourself;
• If Authorized Persons are your people, they are not a party to the contract, and therefore they cannot breach it. You will be in breach if you fail to ensure that they handle Confidential Information correctly.

Answer 2

Yes, although unreasonable, it might be enforceable. By signing the contract, you are knowingly consenting to respond under the terms of that clause. That is why you need to insist that the clause be removed, more so since the CEO agreed to remove it.