I am responsible for implementing a software platform provided by a US company. I work in an international company having HQ in Germany, but also offices in Eastern-Europe (within EU).

My security department asked for a security assessment for the platform and provided me with a few dozens questions to be answered. I conveyed them to the provider and they told me that they can only release the answer if we sign a Mutual Non-Disclosure Agreement.

This is where things become trickier because there is a contradiction between this MNDA and our legal department recommendations.

Our legal department recommended the following (emphasis mine):

The non-disclosure agreements are strongly related and accessories to the main legal relationship between the parties. Their existence is justified by the sensitive nature of the information disclosed by the parties during said relationship. Therefore, we strongly recommend limiting the non-disclosure agreement to the information disclosed during your project.

The MNDA stipulates the following (amonng many others, but this is the main issue):

Confidential Information shall mean, subject to the exceptions set forth in Section 2 hereof, any and all technical and non-technical information provided, disclosed, or made available by either Party or their respective agents to the other Party, whether before, on, or after the date of this Agreement, which includes, without limitation: (a) any information or documents provided under or in connection with any current or future agreement between the Parties;

Shortly put, the provider want the MNDA to cover all future interaction (pragmatic approach, less papers to be signed in the future), while our legal department has a more cautious approach (MNDA should cover strictly the provided security assessment document).

I have no legal expertise, but I am curious how are these type of contractions solved in practice. Also, is there an explanation for such a difference of approach in relation to MNDAs? (US vs. Europe)

  • I am really new to this community and I am not happy with the title and tags. I would really appreciate some help with them. Thank you. – Alexei Oct 20 '19 at 14:20
  • Ask your legal department. – BlueDogRanch Oct 20 '19 at 14:50
  • @BlueDogRanch - the first quote is from my legal department after being asked to analyse the MNDA. I will ask them again, but I am skeptic that I will receive a different answer. Thanks. – Alexei Oct 20 '19 at 15:23
  • 2
    My point is that this site is not for specific legal advice; your legal department must advise you on what to do. – BlueDogRanch Oct 20 '19 at 15:54

how are these type of contractions solved in practice.

The wording or language of the contract is decisive toward ascertaining whether it has been breached. That language is supposed to reflect the parties' intent at the time the contract was entered.

It is only in the event of language confusion (provided that the doctrine of contra proferentem is inapplicable or futile) that extrinsic evidence would be assessed in order to identify the parties' intent, and consequently their duties and obligations under the contract.

Once a breach of contract has been identified, the next issue consists of assessing the losses the injured party incurred as a result of that breach. If no losses arise from the breach, pleading and proving a claim of breach of contract is inconsequential.

is there an explanation for such a difference of approach in relation to MNDAs? (US vs. Europe)

It is not that US and Europe mandate different approaches to NDAs or to contracts in general. The terms and scope of contracts are largely a matter of each party's purposes and the ensuing negotiations toward reaching a mutual agreement.

You might want to inquire of your counterparty whether encompassing "future agreements" in that clause truly serves any concrete purpose. If it does not, then keeping that boilerplate in the contract seems pointless.

Furthermore, many contracts contain a clause stating that the contract at issue "supersedes any prior and contemporaneous agreements between the parties". Accordingly, there is no impediment for a subsequent contract to render null and void the constraints regarding "future agreement[s]" that your counterparty seeks in the contract you currently analyze.

| improve this answer | |
  • I upvoted for the second part of the answer. – George White Oct 20 '19 at 19:37

Negotiation and Compromise

Basically, you do what they want, they do what you want or you both walk away from the deal. Where parties approach a negotiation with incompatible positions, these are really the only outcomes.

| improve this answer | |

Businesses negotiate this type of agreement all the time. Either you work out some wording that both can live with or you walk away.

| improve this answer | |

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.