Term and Duration

💡 Plain English Explanation

This clause establishes two important timeframes: (1) how long the parties can exchange confidential information, and (2) how long the confidentiality obligations last. These can be the same or different periods.

For example, an NDA might allow information sharing for 2 years (the "disclosure period") but require confidentiality to continue for 5 years after the last disclosure (the "confidentiality period"). Understanding this distinction is crucial for negotiation.

⚠ Why It Matters

Perpetual NDAs Are Disfavored: Courts increasingly view perpetual confidentiality obligations as unreasonable. While trade secrets may warrant longer protection, most business information becomes stale and less valuable over time.

Industry Standards: For general business information, 2-5 years is typical. For trade secrets, 5-10 years or "as long as it remains a trade secret" is common. Technology companies often use shorter terms due to rapid innovation.

Lesson from Stormy Daniels NDA: That agreement had no time limitation, which courts view skeptically. A reasonable term makes your NDA more likely to be enforced.

🚩 Risk Factors

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  Perpetual obligations - Clauses stating confidentiality lasts "forever" or "in perpetuity" may be unenforceable and signal an overreaching agreement.
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  Unclear trigger dates - When does the period start? Date of agreement? Date of each disclosure? End of relationship? Ambiguity creates disputes.
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  Trade secrets treated the same as general info - Trade secrets warrant longer protection than marketing plans. Consider tiered duration.

📄 Clause Versions

Term and Duration.

(a) Disclosure Period. This Agreement shall commence on the Effective Date and shall continue for a period of two (2) years thereafter (the "Disclosure Period"), unless earlier terminated by either party upon thirty (30) days' prior written notice to the other party.

(b) Confidentiality Period. The obligations of confidentiality set forth in this Agreement shall survive any expiration or termination of this Agreement and shall continue for a period of three (3) years following the date of disclosure of the applicable Confidential Information.

(c) Trade Secrets. Notwithstanding the foregoing, information that constitutes a trade secret under applicable law shall remain subject to the confidentiality obligations of this Agreement for so long as such information qualifies as a trade secret.

(d) No Obligation to Disclose. Nothing in this Agreement obligates either party to disclose any Confidential Information to the other party.

Term and Duration.

(a) Term. This Agreement shall commence on the Effective Date and shall continue in effect until terminated by the Disclosing Party upon written notice to the Receiving Party. The Receiving Party may not unilaterally terminate this Agreement.

(b) Survival of Confidentiality Obligations. The obligations of confidentiality and non-use set forth in this Agreement shall survive any expiration or termination of this Agreement and shall continue for the longer of:
    (i) A period of seven (7) years following the termination or expiration of this Agreement; or
    (ii) With respect to any Confidential Information that constitutes a trade secret, for so long as such information remains a trade secret under applicable law.

(c) Continuing Obligations. The Receiving Party's obligations under this Agreement shall apply to all Confidential Information disclosed at any time during the term of this Agreement, regardless of when such Confidential Information was disclosed.

(d) Effect of Termination. Upon termination of this Agreement, the Receiving Party's right to receive Confidential Information shall cease, but all other obligations shall continue in accordance with this section.

Term and Duration.

(a) Term. This Agreement shall commence on the Effective Date and shall continue for a period of one (1) year thereafter, unless earlier terminated by either party upon fifteen (15) days' prior written notice. This Agreement may be renewed for additional one-year terms upon mutual written agreement of the parties.

(b) Confidentiality Period. The obligations of confidentiality set forth in this Agreement shall continue for a period of two (2) years from the date of disclosure of the applicable Confidential Information, after which time such obligations shall expire and the information may be used without restriction.

(c) Automatic Expiration. For the avoidance of doubt, the confidentiality obligations with respect to any Confidential Information disclosed hereunder shall automatically expire on the second anniversary of the date of such disclosure, and such information shall no longer be considered Confidential Information under this Agreement.

(d) No Continuing Obligations. Upon expiration of the confidentiality period applicable to any Confidential Information, the Receiving Party shall have no further obligations with respect to such information.

💬 Negotiation Tips

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  Match term to information type. Marketing plans may only need 2 years of protection; source code might need 7. Consider tiered durations.
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  Avoid perpetual obligations. Courts disfavor them, and they make compliance difficult. Use "as long as it remains a trade secret" for genuinely sensitive information.
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  Clarify the trigger date. Does confidentiality run from the agreement date, disclosure date, or termination date? Be explicit.
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  Consider industry standards. In fast-moving tech, 2-3 years is common. For pharmaceuticals or manufacturing, 5-7 years may be appropriate.