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Use Clauses and Related Provisions in NDAs: Avoiding Unintended Standstills and Restrictions on Transactions

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, September 10, 2024

Recorded event now available

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This CLE course will guide business counsel in reviewing nondisclosure agreements (NDAs) to avoid unintended consequences such as excessive restrictions on the ability to engage in transactions related to the target company or its industry. The speaker will examine potential traps and possible solutions related to use clauses and other common NDA provisions.

Description

NDAs are key components to transactions that allow for the flow of commercial information from the disclosing to the receiving party for due diligence purposes while protecting the disclosing party's proprietary and confidential information.

Nearly all NDAs contain a use clause that defines and limits how the receiving party may use the information disclosed. If not carefully drafted, however, a use clause and various related provisions may have the same effect as a standstill or non-circumvent clause and could block the receiving party from pursuing desired transactions.

Business counsel must be aware of the potential pitfalls that may arise in negotiating NDAs and best practices for drafting use clauses and other provisions to avoid unintended consequences.

Listen as Cary M. Reiss, Partner at Barnes & Thornburg, shares examples from his extensive experience drafting and negotiating NDAs and discusses potential pitfalls and best practices for drafting use provisions and other clauses.

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Outline

  1. What’s the use?
  2. Defining the transaction/purpose
    1. Martin Marietta Materials Inc. v. Vulcan Materials Co.
  3. Description of the target
  4. Interaction with other provisions
    1. Non-circumvent
    2. Non-solicit
  5. Expanding the use
    1. Overall knowledge
    2. Residual knowledge
    3. Active in the industry
  6. Other considerations
    1. Definition of “confidential information”
    2. Injunctive relief
    3. Term and termination
    4. Legally required disclosure
    5. Whistleblowers

Benefits

The speaker will review these and other issues:

  • What complex legal and business issues must counsel consider when negotiating use clauses and related provisions in NDAs?
  • What are some key considerations and best practices for drafting and negotiating use clauses in NDAs?

Faculty

Reiss, Cary
Cary M. Reiss
Partner
Barnes & Thornburg

Mr. Reiss has deep experience advising businesses of virtually all sizes in the United States and Canada on a range of...  |  Read More

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