Consider the following provision, which I encountered by chance:
Confidential Information will not include information that the Recipient can reasonably demonstrate … was rightfully known by it or its Affiliates prior to the date it was disclosed by the Discloser.
No, we’re not going to get into nuances of confidentiality agreements. Instead, this post is about the notion of a standard based on whether a party can reasonably demonstrate something.
I say that’s a bad idea. It appears that you’re seeking to replace whatever burden of proof would apply in litigation with one established by contract. It’s uncertain whether that would work, given that seeking to preempt judicial discretion is a dicey proposition. (Hey, two guys wrote this article about that.) It’s also unnecessary, as it would likely be equivalent to the standard a court applies.
So add that X can reasonably demonstrate to the reject pile.
Ken:
Setting aside the “reasonably” part, what language would you suggest where the parties want to place the burden of proof on one party, particularly if the case law on the subject results in uncertainty?
Chris
Here’s the only example that comes to mind:
“Excluded Information” means information that comes within any of the following categories, with the Recipient having the burden of establishing that any information constitutes Excluded Information: …
“Can demonstrate from written records” is better, from the disclosing party’s perspective. Recipient might want to broaden it, which is probably where the phrase at issue comes from. “Written evidence” is no good as this could include an affidavit after the event.
Another reason ‘can reasonably demonstrate’ is scrap heap material is that it fails to answer questions like demonstrate to whom? Where? When? By what standard of persuasion? With what right of appeal?
Like you, Ken, I can’t think of an instance where it would do anything useful all by itself. The quoted passage would be better without it, perhaps like this:
‘Confidential Information will not include information rightfully known, before the Discloser disclosed it, by one or more of the following: the Recipient and its Affiliates’.