Here’s a gripping issue: What should one call a contract requiring that certain information be kept confidential—confidentiality agreement or nondisclosure agreement?
What nondisclosure agreement has going for it is the convenient and universally recognized initialism NDA. By contrast, I’ve rarely seen CA used for confidentiality agreement.
Nevertheless, I prefer confidentiality agreement, because nondisclosure agreement expresses the concept in the negative. When given the choice, I prefer using the positive.
For what it’s worth, here are some Edgar statistics: of all contracts filed as exhibit 10 “material contracts” in the past month, 421 use confidentiality agreement and 132 use either nondisclosure agreement (46) or non-disclosure agreement (86).
By the way, if you’re going to use nondisclosure agreement, lose the hyphen: I agree with Garner’s Modern American Usage that “With few exceptions, the prefix non– does not take a hyphen unless it is attached to a proper noun.”
13 thoughts on ““Confidentiality” or “Nondisclosure”?”
I’m not sure how much insight EDGAR reveals on this topic. NDAs and their ilk would rarely qualify as material agreements, so I’m surprised any are filed at all. My guess is that the filed agreements contain more substantive provisions than just confidentiality restrictions.
While I use the term NDA or nondisclosure agreement, the term is not ideal because usually NDAs restrict both use and disclosure, and the NDA titling overly focuses on the disclosure restrictions and ignores the use restrictions.
Another reason for using “confidentiality” instead of “nondisclosure” is that “confidentiality” suggests a broader set of obligations than “nondisclosure”. Most such agreements cover more than simple nondisclosure – for example, putting restrictions on the use of the confidential information.
Ken, on this side of the Atlantic I more often see CDA than NDA. Presumably stands for confidential disclosure agreement.
But for the title of the agreement, confidentiality agreement is more often used than nondisclosure agreement.
Illogical, isn’t it?
By the way, I have always disliked the language, often seen in US CDAs/NDAs along the lines of: “the obligations of confidentiality and nondisclosure set out in this agreement…” Surely “and nondisclosure” is redundant?
Eric: My Edgar searches didn’t look for contracts with the title “confidentiality agreement” or “nondisclosure agreement.” Instead, I looked for use of the terms anywhere in any kind of contract. Ken
Ken, the titles that parties use to label their agreements are not conclusive. Therefore, the actual content of the agreement is of more aid to a judge.
I think the above is also relevant to your point about drafting in the positive rather than the negative. I wasn’t fully persuaded on this point by the way…
Gil: Who said anything about aid to a judge? My only interest is figuring out which title works best for the reader, in terms of being both concise and informative.
In terms of positive versus negative, in any kind of writing you’re better off expressing a concept as X rather than not Y, all other things being equal.
I routinely use the term “CDA” as mentioned by Mark Anderson (even if the title of the document is Nondisclosure Agreement) because I work in the pharmaceutical/biotech industry and NDA means New Drug Application. The CDA is routinely used for confidentiality agreements and non-disclosure agreements. It avoids momentary confusion.
I use the term nondisclosure agreement or proprietary information agreement. In the government contracting arena, confidential is a security classification level. Thus, it is confusing and potentially misleading when the parties agree to hold information as “confidential”.
People will use the convenient shorthand regardless of the actual title. I have seen people refer to a real estate purchase agreement as a PSA, even though the agreement may call itself a Purchase Agreement, Real Estate Purchase and Sale Contract, Contract of Sale, or just plane Agreement. Dirt lawyers commonly refer to a nondisturbance agreement as an SNDA (subordination, non-disturbance and attornment agreement), even though SNDA is never a true acronym for the title of the agreement. (At best, the acronymn should be SNAA.) This practice does not trouble me; I guess I am just not an acronymaniac.
Jack: I think your approach makes sense. Ken
I’ve always understood the distinction to be that non-disclosure agreements are signed by vendors, suppliers and potential customers whereas confidentiality agreements are signed by employees.
Ben: That seems arbitrary. Ken