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Why you need Confidentiality and Teaming Agreements

WHY DO YOU NEED A CONFIDENTIALITY AGREEMENT?

The law has long protected information that is deemed “confidential” from wrongful disclosure. Indeed, confidential information will be protected under the common law without a confidentiality agreement.

Notwithstanding that, there are significant advantages to having a well-drafted confidentiality agreement. These advantages include:

Clearly describing and identifying which documents or classes of information are deemed to be confidential.
Clearly describing the nature of the confidentiality obligation. Does a recipient of confidential information have the right to disclose that information to a colleague/employee within the same company? Does the recipient of the information have the right to disclose the confidential information to an employee of a subsidiary or parent company? Does the recipient have the right to disclose the confidential information to a professional adviser such as a lawyer, insurer or specialist consultant?
Restricting the use of confidential information to a particular purpose. Typically a non-disclosure agreement also provides a restriction on the purpose for which the confidentiality information can be used. This means that the discloser has the ability not only to prevent information being disclosed to other people but also to restrict how the information can be used.
Providing additional rights, protections and remedies. A non-disclosure agreement also typically provides for:
- the return of the confidential information at the end of the term of the agreement or on demand;
- issues such as privacy and publicity; and
- the basis of claiming damages and the consequences of breach of the non-disclosure arrangements.

The importance of having an agreement is that these rights are set out in detail and are often in addition to the more general obligations under the common law to protect confidential information.

WHY DO YOU NEED A TEAMING AGREEMENT?

Teaming agreements set out the roles, responsibilities and obligations of a prime contractor and the sub-contractor during the process of the parties working together in preparation for a tender response and until the tender is finalised. There are four essential elements to a teaming agreement:

Clauses which deal with confidentiality and the exchange and disclosure of confidential information;
Setting out the roles and responsibilities of the parties working together to submit a tender response;
Setting out the commercial relationships between the parties during the bid process and during the post-tender response submission process; and
Setting out the basis of pricing and contract terms between the parties.

In today’s market it is quite common for ICT suppliers to be working with many organisations at different times, and often these organisations are in competition with each other. One day they are partnering and the next day they are competing with each other. Accordingly, it is critical to determine issues such as:

Which party will be the prime contractor and which party will be the sub-contractor.
Whether the prime contractor is entitled to work with multiple competing sub contractors.
Whether a sub-contractor is entitled to work with multiple competing prime contractors, or indeed can the sub-contractor submit a bid in its own name.
The extent to which the terms and conditions of the prime contract are to be flowed through to the sub-contractors and what prices the sub-contractor will charge the prime contractor for the sub-contractor’s goods and services.
Under what circumstances can the teaming agreement be terminated (i.e. the prime contractor is no longer obligated to provide the sub-contractor’s goods or services in respect of the tender).

Next: Legal Protection for Confidential Information

Why you need Confidentiality and Teaming Agreements Legal Protection for Confidential Information Key Commercial Issues Tips to Make Money

One-Way Confidentiality Agreement Mutual Confidentiality Agreement Teaming Agreement (Prime Contractor) Teaming Agreement (Sub-contractor)

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