Confidential information is commonly shared during acquisitions, investments, joint ventures, financings and major commercial contracts. Harper James is a UK full-service commercial law firm advising businesses on the laws of England and Wales, including commercial contracts and corporate transactions.
Before negotiations begin, identify what must remain confidential. This can include financial records, customer and supplier lists, pricing, product plans, source code, trade secrets, employment information and details of the proposed transaction. Classifying information by sensitivity helps determine who can access it and which safeguards are appropriate.
An early confidentiality agreement, often called a non-disclosure agreement (NDA), should define the confidential information, explain the permitted purpose for its use and identify who can receive it. It should also restrict copying, require reasonable security measures and set out what happens when discussions end. The agreement should address permitted disclosures required by law and disclosures to professional advisers, investors, lenders or group companies.
A controlled virtual data room provides a central location for documents and creates a record of access. A business can adopt a process in which information is uploaded in stages, access is limited by role, particularly sensitive documents require separate approval, and questions are handled through a documented channel. Personal data should be shared only where necessary and managed in line with UK data protection requirements.
Confidentiality provisions should also appear in the principal transaction documents. A share purchase agreement, investment agreement or joint venture agreement normally deals with continuing confidentiality, permitted announcements, return or deletion of information and remedies for breach. These terms should be consistent with any earlier NDA and with obligations owed to employees, customers and other third parties.
Confidentiality protection should continue after the deal closes where the information retains commercial value. The relevant agreement should state the duration of the obligation, while trade secrets require protection for as long as they remain secret. Businesses should also maintain practical controls, including access reviews, employee confidentiality obligations, secure document storage and a process for reporting suspected unauthorised disclosure.
If information is misused or disclosed, the available response depends on the facts and the contract. Possible steps include preserving evidence, seeking the return or deletion of documents, notifying affected parties where required, and pursuing contractual or equitable remedies. Clear records of what was disclosed, to whom, and on what terms support a proportionate response.