Today I saw this sentence (emphasis added) from a confidentiality agreement:
Recipient shall be liable for any unauthorized disclosure or use of Confidential Information by or related to any party to whom Recipient discloses Confidential Information, as if such disclosure or use were by Recipient itself.
It’s relevant to something discussed at yesterday’s in-person Drafting Clearer Contracts presentation (more about that here).
In the course of our discussing usages associated with the front of the contract, I said that I don’t create the defined term Party to refer to a party to the contract. Instead, I just say party—not even party hereto. (And no, I don’t do the ludicrous individually a “Party” and collectively the “Parties” thing!) Someone asked, But what if a drafter uses party to mean something more general?
Well, lo and behold, that’s what the sentence above does—any party is used to mean “any person”. What are the implications of that?
This allows me to offer a general proposition: Just because someone, somewhere, might make a dumb drafting decision, that doesn’t mean we have to adjust our own drafting to protect against that decision.
In other words, the lesson imparted by that sentence isn’t, Always use party as a defined term! Instead, the lesson is, If you don’t use party to mean person, you have nothing to worry about!
