This clause explains what happens if a court, regulator, or government agency forces you to reveal confidential information. Without this clause, you might face a lawsuit from the other party for breaking confidentiality, even though you had no legal choice. The clause typically requires you to give the other party notice before disclosing, so they can try to stop it in court. In the US and UK, courts can compel disclosure through subpoenas (legal orders), and this clause protects you from liability when you obey the law. Example: A tax authority demands your supplier's pricing information—this clause lets you hand it over without breaching your confidentiality agreement.
Always insist this clause is included—it protects you from impossible situations. Negotiate to require "prompt written notice" to the other party before disclosure, giving them time to seek a court order blocking it. If you're the party receiving information, add language requiring the disclosing party to request confidential treatment from the authority (like marking documents "confidential" in court filings). ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause explains what happens if a court, regulator, or government agency forces you to reveal confidential information.
Why should I care about this clause?
Without this clause, you might face a lawsuit from the other party for breaking confidentiality, even though you had no legal choice.
What are my options?
The clause typically requires you to give the other party notice before disclosing, so they can try to stop it in court.
How does this affect small businesses?
In the US and UK, courts can compel disclosure through subpoenas (legal orders), and this clause protects you from liability when you obey the law.