This clause specifies who you're allowed to share confidential information with—for example, your employees, advisors, or subcontractors—and under what conditions. It matters because confidentiality clauses would be impractical if you couldn't share information with anyone; you need to tell your accountant about pricing, or your lawyer about a contract dispute. Under UK law, you can't be held liable for breaches by people you've properly authorized and supervised, but only if the contract clearly permits the disclosure. A specific example: the clause might say "you may disclose Confidential Information to your employees and professional advisors on a need-to-know basis, provided they are bound by the same confidentiality obligations."
Ensure the clause explicitly allows you to disclose information to your employees, lawyers, accountants, and other advisors who need to know it to help you perform the contract. Require that anyone you disclose to must also be bound by confidentiality (ideally in writing), and make sure the clause covers situations where you're legally required to disclose (e.g., to a court or regulator)—otherwise you could be in breach of contract for obeying the law. If the other party is very restrictive about who you can tell, push back and ask them to specifically approve the categories of people you need to involve, rather than having to ask permission case-by-case.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause specifies who you're allowed to share confidential information with—for example, your employees, advisors, or subcontractors—and under what conditions.
Why should I care about this clause?
It matters because confidentiality clauses would be impractical if you couldn't share information with anyone; you need to tell your accountant about pricing, or your lawyer about a contract dispute.
What are my options?
Under UK law, you can't be held liable for breaches by people you've properly authorized and supervised, but only if the contract clearly permits the disclosure.
How does this affect small businesses?
A specific example: the clause might say "you may disclose Confidential Information to your employees and professional advisors on a need-to-know basis, provided they are bound by the same confidentiality obligations."