This clause allows you to share confidential information if a government regulator (like the Financial Conduct Authority in the UK or the SEC in the US) legally requires you to do so. It matters because regulators have legal power to demand information, and you cannot refuse them—if you try to hide behind confidentiality, you'll face fines or prosecution. This clause protects you by saying the other party cannot sue you for disclosing their secrets when the law forces your hand. Without this clause, you'd be caught between two impossible choices: break the law by refusing the regulator, or break the contract by complying.
This clause is essential and you should insist on it—any reasonable business partner will accept it because they know regulators have real legal power. However, try to add language requiring you to give the other party notice before disclosing (if the law allows it), so they have a chance to object or seek a court order to keep the information secret. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause allows you to share confidential information if a government regulator (like the Financial Conduct Authority in the UK or the SEC in the US) legally requires you to do so.
Why should I care about this clause?
It matters because regulators have legal power to demand information, and you cannot refuse them—if you try to hide behind confidentiality, you'll face fines or prosecution.
What are my options?
This clause protects you by saying the other party cannot sue you for disclosing their secrets when the law forces your hand.
How does this affect small businesses?
Without this clause, you'd be caught between two impossible choices: break the law by refusing the regulator, or break the contract by complying.