NDA Checklist

My first real encounter with Confidentiality Agreements or Non-Disclosure Agreements (“NDAs“) was as a secondee in the legal team of a European bank specializing in asset finance. This was the one document most of the bankers needed my help with in order to discuss specific business opportunities with their clients. I noticed the same points being raised over and over again during negotiations and before returning back to my law firm at the end of my secondment, I drew up a very useful table to help them negotiate their NDAs.

After becoming a legal translator, NDAs reappeared in my life. Offering to sign one is actually a good selling point for legal translators as confidentiality is very important to many clients, whether the documents are for litigation purposes or for new transactions. The very first document almost all the translation agencies (“TA“) I have worked for have sent me as an NDA, or, should I say, an adaptation of the traditional NDA (more on this later).

So I adapted my table to the translation industry and I thought I would share parts of it with you to help you in your negotiations. But before doing that, let us remind ourselves what an NDA is and what its limitations are.

What is an NDA?

An NDA is a confidentiality agreement that requires one party to keep certain information that is disclosed in the course of a transaction confidential and to use that information only for the particular purpose for which it has been disclosed. It creates a contractual right as well as helping to establish a relationship of confidence on which an action under general law can be based.

An expressed NDA will usually take precedence over any implied position under the law, unless the law imposes a higher standard (e.g. information relating to trade secrets or personal data) or the NDA conflicts with public policy. Depending on which country you live in or deal with, you may also be under an independent duty of confidence if you know the information you receive is confidential (like in the UK) or a duty to act in good faith (like in the US, and in many continental European jurisdictions such as Germany, France, Italy or Spain).

What is all the fuss about anyway?

Many translators may not be very concerned about NDAs because:

  • they are difficult to enforce;
  • they are restrictive and will be construed against the party seeking to rely on them; and
  • most jurisdictions will not enforce agreements in so far as they try to make public information confidential.

However, a client or a translation agency may still attempt to sue you for damages for wrongful use or for disclosure and you may need to invest time and money in dealing with their claim. So why not do everything you can to avoid this from the start?

Translation agencies and NDAs

Many translation agencies will ask you to sign an NDA before discussing potential work. However, my experience is that this NDA is in fact trying to include other provisions. This article does not purport to look into these additional provisions but here are two that you need to watch out for:

  • clauses excluding payment if the standard of the translation is not satisfactory (in this case, I send them a link to the procedure on ITI website and ask for a similar process); and
  • non-competition clauses (I only agree not to contact the TA’s end-clients for whom I have done some work through that agency if (i) I had not worked for them before and (ii) I have been told their identity by the TA).

THE Table

Let’s now turn to my table. I have used this with translation agencies and direct clients and have rarely seen my requests rejected. You may be worried about losing a potential new client by raising some points but, in my experience, as long as you provide a reasonable explanation, they rarely try to argue. The exact wording will need to be adapted to the original draft NDA you have received and some entries may not be applicable.

For the purpose of this table the “Discloser” is the Client/Translation Agency, the “Receiver” is the translator and the “Project” is the translation project to which the information relates.

Clause

 

Standard wording/ Market Practice Additional comments

 

Definition of Confidential Information (“CI”)

 

This definition needs to cover the following:

–      Type of information

–      Identity of Discloser and Receiver

–      When such information is to be provided

–      In connection with what Project

 

For freelance translators, it is better to have this definition as restricted as possible such as:

all non-public, confidential and/or proprietary information of the Discloser, now or at any time hereafter provided to the Receiver by the Discloser, or any of the Discloser’s officers, employees, agents or representatives, in connection with the Project

 

Exceptions to Confidential Information Information that:

–       is or becomes generally available to the public other than as a result of a disclosure by the Receiver;

–       is or becomes available to the Receiver on a non-confidential basis by the Discloser prior to its disclosure by the Receiver;

–       is or becomes available to the Receiver from a source not known to the Receiver to be under an obligation of confidentiality to the Discloser;

–       is independently developed by the Receiver without the use of CI.

These exceptions are often not included by TAs but are very standard and should therefore be requested (sometimes the second exception is rejected, which is acceptable if this poses a particular problem).

 

You can also try to add information that is trivial, obvious or useless but this may not be always accepted.

Definition of Project This needs to set out clearly the project to which the NDA applies.

 

This definition is often wider with translation agencies asking for an umbrella NDA for all future projects where the Receiver will perform services.

 

Definition of Subcontractors/

Representatives

(for direct clients allowing you to work with other translators or a proofreader)

–     any employee of the Receiver

 

–     any proofreader and editor used by the Receiver

There may be a proposal that these third parties sign a separate NDA in respect of the CI. This is not often practicable and as long as there is an undertaking that “the Receiver shall use reasonable endeavours to procure that such [Representatives] shall be informed of the confidential nature of the Confidential Information and  requested by the Receiver to treat the Confidential Information as confidential in accordance with the terms hereof” this should be acceptable.

You can also send a copy of the NDA to your proofreaders or fellow translators and add a page where they acknowledged to have read the agreement and agree to comply with its terms as if they were the Receiver.

 

Non-disclosure obligation The Receiver will keep all CI confidential/will not disclose any part of the CI.

 

Although not ideal for marketing purposes, an additional undertaking can be added/is acceptable in the following terms:

No Party may refer to the relationship between them under this Agreement or any other relationship, agreement, or arrangement that they have undertaken with respect to the Project in external communications between that Party and a third party without the prior consent of the other Party.”

 

Exception to non-disclosure obligations –        As required by law, regulation or legal process

 

–        As permitted by the Discloser in writing

Please note that the first exception here applies to law, regulation or legal process and all 3 are important.

 

Clients/TA may then request for a provision (which is acceptable) stating that the Receiver will, to the extent permitted by law, regulation or legal process, provide notice thereof to the Discloser so that the Discloser, at its sole option (but without obligation to do so), and at its sole expense, may attempt to seek a protective order or other appropriate remedy and/or waive compliance with the provisions of the NDA.

 

Destruction of CI –        Upon the Discloser’s request

 

–        the Receiver will use its reasonable efforts to destroy all CI in tangible form

 

You should always ask for an exception if you have contracted professional insurance. I usually ask to add “except CI (i) that the Receiver needs to retain in order to assure compliance with regulatory and legal requirements, (ii) required under any professional insurance indemnity policy contracted by the Receiver and excluding terminological glossary entries complied by the Receiver (except for translation memories)“.
Termination provisions Between 1 and 3 years I have seen translation agencies ask for 5 years. I personally do not fight too much about it if they accept all my other comments as I treat all my projects as confidential in any case. I pay more attention to the duration if the NDA also includes a non-competition clause.

 

 

I hope this article was useful. Do not hesitate to contact me if you have come across any difficult negotiations or if you have stories of successful ones.

Click here to download a pdf of the article as published in the ITI Bulletin.

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