So you finally get around to signing that NDA with the potential business partner. But when did you start giving that partner access to your confidential information? Was it before you signed? Was it before the effective date of the NDA? These facts matter when determining if that NDA actually governs information already exchanged between the parties.

Courts generally are clear that when a written agreement is complete, clear and unambiguous on its face, it must be enforced according to the plain and ordinary meaning of its terms. The general rule is that where the intention of the parties may be gained wholly from the writing, construction of the contract is a question of law for the court. If terms are not clear and unambiguous, construction becomes a question of fact.

Therefore, when the parties agree that the NDA is effective on a certain date, the court will enforce that language. If no such date is stated, it will typically be effective as of the date of last signature. If that effective date was after one party (the “disclosing party”) already disclosed information to the other (the “receiving party”), such information of the disclosing party may not be governed by the NDA, and the receiving party would not be obligated to keep it confidential.

When an agreement is signed after initial discussions, courts will typically allow those prior discussions and disclosures to be covered by the NDA if the language of the NDA applies to those prior exchanges of information. Such may be accomplished by language in the definition of Confidential Information definition that states “any information or data or both … disclosed before, on or after the date of the signature of this agreement…” is confidential information. Sometimes the same is accomplished by backdating the effective date of the agreement to a date that was the earliest date the parties began exchanging information. When such language is included, or other similar clear and unambiguous language, a court will enforce the contract to the plain meaning of its terms.

That might not necessarily be true when there is some other agreement, such as a Memorandum of Understanding (“MOU”), that governs up until the NDA is signed. In that case, the MOU is not displaced by the NDA until the date agreed to on the NDA.

Also keep in mind that NDAs may set an expiration date after which the NDA no longer applies to information exchanged between the parties. This should not be confused with the period of “survival” of the obligations of confidentiality that existed prior to the expiration date. Once again, clear and unambiguous terms are key. Even if the parties believe they are bound, vague and indefinite terms of the agreement without reasonable means to determine whether the agreement has been kept or broken, may lead to an unenforceable contract.

In sum, have clear, explicit definitions in your NDA. Not only should Confidential Information be clearly defined, but the start and end dates should be explicitly defined.

We at Peacock Law can help review and draft agreements to avoid any conflicts.