The NDA exam has reservations

NDAWhat to watch out for in the confidentiality agreement

Suggested formulation: The penalty is due for each offense. The parties waive the defense of the continuation context.

It should be noted, however, that the waiver of the defense of the continuation context cannot be effectively agreed within the framework of general terms and conditions, because this is seen as an inadmissible, unreasonable disadvantage for the contractual partner. Terms and conditions are already in place if the clause or the entire agreement is pre-formulated for a large number (more than three) of contracts and no negotiation takes place. This always applies if a form is used that is not negotiated.

Contract duration

principle

For a non-disclosure agreement, it is crucial how long the non-disclosure agreement is to apply beyond the duration of the agreement. For those who demand confidentiality, an unlimited duration should be aimed for, as they want to ensure that their confidential information remains confidential forever. If there is closer cooperation, a new regulation can then be made in the cooperation agreement that supplements or replaces the NDA.

What happens if nothing has been regulated in the contract?

The law does not regulate the parties here. Therefore, the contract is to be interpreted according to §§ 133, 157 BGB. It is important to consider what the parties would have wanted if they had wanted to reach a settlement. This is where the preamble, which can help with the question of what the parties intended, is of particular importance. Regularly, the parties will want to protect their confidential information as long as it is confidential (see What is confidential information? And What is not confidential information?). In case of doubt, this always means unlimited, as it cannot be in the interests of the parties that internal company information leak out after a certain period of time or that the contractual partner uses them for its own purposes.

Legal Limits

General legal limits

As with almost every contract, freedom of contract applies to a non-disclosure agreement. This means that the parties can freely determine the content within the legal limits.

These legal limits are on the one hand the prohibition of immorality according to § 138 BGB and the obligation to adhere to the rules of common usage (§ 242 BGB). These limits are exceeded if the agreement is too broad and too confidential. This would lead to an immoral restriction of the contractual partner in his entrepreneurial freedom.

On the other hand, when using pre-formulated NDAs, attention must be paid to compliance with the regulations on the effectiveness of general terms and conditions according to §§ 305 ff. BGB.

Severability clause

In some cases, NDAs have what is known as a severability clause. This means that if a clause is null and void, the entire contract should not be null and void and that ineffective provisions will be replaced by those that come closest to the economic interests of the parties.

Suggested formulation: Should individual provisions of this contract be ineffective or unenforceable or become ineffective or unenforceable after the conclusion of the contract, the validity of the rest of the contract remains unaffected. The ineffective or unenforceable provision shall be replaced by an effective and enforceable provision whose effects come as close as possible to the economic objective pursued by the contracting parties with the ineffective or unenforceable provision. The above provisions apply accordingly in the event that the contract turns out to be incomplete.

In the absence of explicit legal regulations, such a provision can be useful for clarification. Sentence 1 of this clause ensures that the ineffectiveness of an individual provision of the contract (partial invalidity) does not result in the invalidity of the entire agreement. According to § 139 BGB, this is the legal consequence if it cannot be assumed that the parties would have concluded the contract even if they had known that the clause in question is void. It is precisely this will that the severability clause is intended to express. In the present example, the application of Section 139 of the German Civil Code (BGB) is expressly excluded (p. 3) - this is the only way to effectively prevent its legal consequences from occurring.

Sentence 2 urges the parties to look for a regulation content for the ineffective clause that comes closest to the purpose they are striving for.

Severability clause and terms and conditions

A special feature must be observed when using NDAs in the form of terms and conditions. § 139 BGB does not apply here, as the general terms and conditions law in § 306 BGB contains a more specific regulation. This legally regulates the continued validity of the contract if the terms and conditions are wholly or partially void or have not been included. In place of the ineffective terms and conditions, the statutory provisions apply in accordance with Section 306 II BGB.

Sentence 2 of the above-related clause violates the prohibition of validity-preserving reductions in terms and conditions law. This means: a clause is either completely effective or completely void. A reinterpretation or reduction to what is still legally possible is currently not planned. The ineffective clause is therefore replaced by the statutory regulation.