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Confidentiality clause
A confidentiality clause defines what information one party must protect, restricts the recipient from disclosing it and, in most agreements, from using it outside a stated purpose, lists the categories that sit outside protection, and sets how long the duty runs. The use restriction is a separate obligation from the disclosure restriction: 85.2% of the 607 NDAs in the ContractNLI corpus were annotated as entailing a limited-use duty. The two terms that decide what the clause is worth are the exclusions list and the period, together with the date the period starts from. Two clauses that both say five years can expire years apart.
Reviewed by
Brent Farese
Ex-General Counsel & CEO
August 6, 2026
Sample force majeure clause for commercial contracts
A balanced, mutual starting point that reflects the market postures above.
This is a drafting starting point. Every element maps to a measured property, and the combination is more complete than most documents in the public corpus, so it is not a market norm. Replace the bracketed business terms and take advice for the transaction and the governing law.
1. Definition. "Confidential Information" means information one party (the "Discloser") discloses to the other (the "Recipient") that is marked confidential, or that the Discloser identifies as confidential at the time of an oral disclosure and confirms in writing within [15] days. Each party may act as Discloser and as Recipient under this Agreement.
2. Obligations. Recipient shall not disclose Confidential Information to any person other than its employees and advisors who need it for [the Purpose] and who are bound by confidentiality duties no less protective than these, and shall not use Confidential Information for any purpose other than [the Purpose]. This Agreement grants Recipient no licence or other right in Confidential Information.
3. Exclusions. Confidential Information does not include information that (a) is or becomes public without breach of this Agreement, (b) Recipient possessed before disclosure without a duty of confidence, (c) Recipient develops without use of or reference to Confidential Information, (d) Recipient receives from a third party that owes the Discloser no duty of confidence, or (e) Recipient must disclose under law, regulation or judicial process, provided that Recipient gives the Discloser prompt written notice where the law permits and limits the disclosure to what the law requires.
4. Period. The obligations in section 2 apply to each item of Confidential Information for [five] years from [the date that item is disclosed]. Confidential Information that constitutes a trade secret under applicable law remains subject to section 2 for as long as it qualifies as a trade secret.
5. Return and retention. On the Discloser's written request or on termination, Recipient shall return or destroy Confidential Information in its possession and confirm that it has done so. Recipient may retain copies held in routine archival backups it cannot selectively purge, copies its legal or regulatory obligations require it to keep, and one copy retained by its legal advisors for compliance purposes. Retained copies stay subject to this Agreement for as long as Recipient holds them.
6. Remedies. Each party acknowledges that a breach of section 2 may cause the other harm that money cannot fully repair, and that the other party may seek injunctive relief in addition to any other remedy. This section does not limit either party's other rights.
Notice of immunity under 18 U.S.C. Sec. 1833(b), for use when the Recipient is an individual, including a contractor or consultant. You are not held criminally or civilly liable under any federal or state trade-secret law for disclosing a trade secret in confidence to a federal, state or local government official, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or in a complaint or other document filed in a lawsuit or other proceeding, if that filing is made under seal.
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Findings from public force majeure clause studies
These figures come from two populations and each one states its own denominator. The lead figures are Aline's own count over ContractNLI, a public corpus of 607 NDAs licensed CC BY 4.0. Aline counted the expert annotations; Koreeda and Manning do not publish these percentages. The fourth card comes from a separate population of 446 employment confidentiality agreements, which its authors built after excluding business-to-business contracts. Read every ContractNLI share as a floor rather than a rate, because a document counts against the share when its text did not address the point.
~48%of commercial contracts even contain a standalone force majeure clauseRutgers, n=621
18%of clauses named a pandemic, epidemic, or disease triggereBrevia / QuisLex, n=171
~12%granted a termination right (about 40% in supply chain / logistics)eBrevia / QuisLex, n=171
90 daysmedian duration before a termination right triggeredeBrevia / QuisLex, n=171
Force majeure terms without published percentages
- Payment carve-out: model clauses (BIMCO 2022, ICC 2020) build in a continuing-payment carve-out, pointing to a common market convention.
- Mitigation obligation: described as common in higher-specificity clauses, without a count.
- Economic hardship: courts do not treat it alone as force majeure unless the clause says so (EAPIL; Vici Racing, 3d Cir. 2014).
Sources- eBrevia / BakerHostetler / QuisLex AI contract study, n=171 (via DFIN).
- Rutgers Business Review, Force Majeure Clauses and the COVID-19 Pandemic, n=621 SEC-filed JV contracts.
- Shook, Hardy & Bacon, Force Majeure and Common Law Defenses: A National Survey.
- EAPIL, The COVID-19 Pandemic and Commercial Contracts. BIMCO 2022 / ICC 2020 model clauses.
Force majeure clause mistakes that create enforcement risk
The clause states no endpoint, so neither party can date the obligation. Courts have treated the absence of a durational limit as a factor when deciding whether a confidentiality agreement functions as an unenforceable restraint. In a comparison population of 446 employment confidentiality agreements, and not commercial NDAs, 93% contained no durational limit at all.
The clause states a number of years and never says what the years run from. Two clauses with the same number expire at different times, because a period measured from each disclosure restarts with every new item of information and a period measured from signature or termination does not.
The definition carries no exclusions, so it sweeps in information that is already public or already known to the recipient. That makes the clause harder to apply and invites a dispute about whether a given item was ever protected. Nearly 40% of the 446 employment agreements studied had no exclusions at all.
The clause says nothing about compelled disclosure, so the recipient must choose between complying with a subpoena and breaching the agreement, and the discloser gets no notice and no chance to seek protective treatment before production. Aline found the notice duty in 65.6% of the 607-NDA corpus, so silence is the minority case there and far from rare.
The return-or-destroy duty carries no archival or legal-hold exception, so it can require deleting material the recipient must keep, including backups it cannot purge item by item and records under a litigation hold. In the 607-NDA corpus, 39.5% were annotated as entailing return or destruction while 27.0% were annotated as permitting retention afterwards and 38.9% as forbidding it.
How to negotiate a force majeure clause
| Issue | Market posture | Reasonable fallback | Push back hard |
|---|
| Payment carve-out | Payment obligations excluded from force majeure | Short grace period for banking-system failure only | Any clause that lets the counterparty stop paying during an event |
| Event list | Enumerated list plus "including, without limitation" | Enumerated plus a catch-all tied to reasonable control | A closed "limited to" list, which leaves you litigating the gap |
| Epidemic | Expressly named after 2020 (most clauses still do not) | "Public health emergency declared by a competent authority" | Silence; courts split on whether "act of God" reaches COVID |
| Notice | Prompt written notice with a workable window | Prompt notice, no fixed day count | Notice as a condition precedent on a 48-hour fuse |
| Termination trigger | Either-party right after a prolonged event (public median 90 days) | A longer trigger, either party | Indefinite suspension with no termination right |
| Economic hardship | Expressly excluded | Silence | "Material adverse change in market conditions," a repricing right in disguise |
Questions about force majeure clauses
What is a confidentiality clause?
A confidentiality clause defines what information is protected, restricts the recipient from disclosing that information and in most agreements from using it outside a stated purpose, lists the categories excluded from protection, and sets how long the duty runs.
The use restriction is a separate obligation from the disclosure restriction. In Aline's own count over the 607 NDAs in the public ContractNLI corpus, 85.2% (517 of 607) were annotated as entailing that the recipient shall not use confidential information for any purpose other than the purposes stated in the agreement.
confidentiality
How long does a confidentiality obligation last?
No standard term exists. In a hand-coded random subsample of 60 NDAs drawn from the 607-document ContractNLI corpus, 23 stated a fixed numeric confidentiality period with a median of 5 years and a range of 1 to 10 years, 20 contained no locatable duration provision, and 5 stated that the obligation runs in perpetuity.
The median rests on those 23 documents, so read it as indicative rather than as a market standard. Separately, 69.5% of all 607 NDAs (422 of 607) were annotated as entailing that some obligations survive termination, which measures survival rather than duration.
confidentiality
What does the confidentiality period run from?
Ask what the period is measured from before you accept the number of years. Among the 23 hand-coded NDAs that stated a numeric period, 9 measured it from disclosure or receipt, 7 from the agreement or effective date, 4 from termination or the end of discussions, 2 used both measures, and 1 tied it to how long the recipient held the information.
A disclosure-anchored period restarts with each new disclosure, so it can outlast a period of the same length running from signature. The denominator here is 23 documents, not 60 and not 607.
confidentiality
Do trade secrets stay confidential forever?
Some NDAs carve trade secrets out of the general period so the duty lasts for as long as the information qualifies as a trade secret under applicable law, and others make that carve-out perpetual. The two formulations are not equivalent: the first ends when the information stops qualifying, and the second does not end.
Aline found the carve-out in at least 19 of the 607 NDAs in the ContractNLI corpus. That count comes from pattern matching, so it is a floor rather than a prevalence rate.
confidentiality
Which exclusions are standard in a confidentiality clause?
The five commonly recited exclusions are public domain, prior possession, independent development, receipt from a third party without a duty of confidence, and disclosure compelled by law.
They are a drafting convention rather than a guarantee. In a comparison population of 446 employment confidentiality agreements, and not commercial NDAs, nearly 40% (177 of 446) contained no exclusions at all for any category of information. Across the 607-NDA corpus, 61.9% (376 of 607) were annotated as entailing the independent-development exception and 74.8% (454 of 607) the third-party-receipt exception.
confidentiality
Does a confidentiality clause cover marked information only?
Both approaches are common and most of the corpus says nothing. Of the 607 NDAs, 22.1% (134 of 607) were annotated as entailing that all confidential information must be identified by the discloser, 26.0% (158 of 607) as contradicting it, and 51.9% (315 of 607) did not address it.
A further 63.9% (388 of 607) were annotated as entailing that confidential information may include information conveyed in speech, which is the practical route around a marking requirement. If you agree to a marked-only definition, add a mechanism for identifying oral disclosures and confirming them in writing.
confidentiality
What is a residuals clause?
A residuals clause lets the recipient keep using information retained in a person's unaided memory.
It is uncommon in the public corpus: Aline found residuals or unaided-memory language in at least 28 of the 607 NDAs. In a comparison population of 446 employment confidentiality agreements, and not commercial NDAs, 4% (18 of 446) carved out general knowledge, skill and experience. A commercial residuals clause and an employment general-knowledge carve-out are related terms rather than the same term.
confidentiality
What does return or destruction require, and what may the recipient keep?
Return or destruction is typically triggered by request or termination, though no public source measures which trigger is used, and the clause should say what the recipient may keep.
Of the 607 NDAs, 39.5% (240 of 607) were annotated as entailing a return-or-destroy duty. On the separate question of retention afterwards, 27.0% (164 of 607) were annotated as permitting it and 38.9% (236 of 607) as forbidding it. Backups the recipient cannot purge item by item and records under a legal hold are the usual reason a recipient cannot comply with an unqualified destroy duty, so pair the duty with an archival and legal-hold exception and say that retained copies stay confidential.
confidentiality
What is the DTSA whistleblower notice, and when do you need it?
18 U.S.C. Sec. 1833(b) immunises an individual who discloses a trade secret in confidence to a government official or attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal.
An employer must give notice of that immunity in any agreement with an employee, contractor or consultant governing the use of a trade secret or confidential information. Subsection (b)(3)(C) bars an employer that fails to do so from being awarded exemplary damages or attorney fees against that person. The penalty is loss of those remedies, not invalidation of the agreement, and the requirement does not reach a purely entity-to-entity NDA. Compliance may also be satisfied by cross-referencing a policy document that sets out the employer's reporting policy for a suspected violation of law.
confidentiality
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- 85.2% of the 607 NDAs in the ContractNLI corpus (517 of 607) were annotated as entailing that the receiving party shall not use confidential information for any purpose other than the purposes stated in the agreement. Source: Aline's own count over the ContractNLI corpus, n=607 NDAs.
- 69.5% of the 607 NDAs (422 of 607) were annotated as entailing that some obligations of the agreement survive termination of the agreement. Source: Aline's own count over the ContractNLI corpus, n=607 NDAs.
- 39.5% of the 607 NDAs (240 of 607) were annotated as entailing that the receiving party must destroy or return some confidential information on termination, and on the separate question of retention afterwards 27.0% (164 of 607) were annotated as entailing that retention is permitted while 38.9% (236 of 607) were annotated as contradicting it. Source: Aline's own count over the ContractNLI corpus, n=607 NDAs.
- 93% of a separate comparison population of 446 employment confidentiality agreements disclosed in federal trade-secret litigation, and not commercial NDAs, contained no durational limit at all (414 of 446). Source: Hrdy and Seaman, 133 Yale Law Journal 669 (2024), n=446 employment confidentiality agreements.
Findings that carry a wide margin, and the questions the data cannot answer.
- No standard term exists. In a hand-coded random subsample of 60 of the 607 NDAs, 23 stated a fixed numeric confidentiality period. Among those 23 the median was 5 years, the range ran from 1 to 10 years, and 5 years was the single most common value at 9 of 23. The denominator is 23, and the subsample of 60 carries a margin of roughly plus or minus 12 points, so treat the median as indicative.
- The anchor decides more than the number. Among the same 23 agreements, 9 measured the period from disclosure or receipt of the information, 7 from the agreement or effective date, 4 from termination or the end of discussions, 2 used both a disclosure-based and a termination-based measure, and 1 tied the period to how long the recipient held the information. A five-year period running from each disclosure restarts with every new item and can outlast a five-year period running from signature by years. No public source publishes this split, which is why Aline coded it.
- In the same subsample of 60, Aline located no duration or survival provision in 20 documents, 5 stated that the obligation runs in perpetuity, 5 stated that it survives termination without stating an endpoint, and 3 tied the endpoint to a condition such as the information ceasing to be a trade secret. "No provision located" describes the extracted text rather than proving the agreement was silent.
- At least 3.1% of the 607 NDAs (19 of 607) carried a trade-secret carve-out extending the duty for as long as the information remains a trade secret or in perpetuity. That count is a pattern-matching floor. The drafting split matters more than the count: a carve-out that ends when the information stops qualifying as a trade secret is not the same term as one that never ends.
- In the comparison population of 446 employment confidentiality agreements, and not commercial NDAs, nearly 40% (177 of 446) contained no exclusions at all for any category of information, 24% (107 of 446) contained an exclusion for a reason other than the information being publicly or generally known, and 22% (98 of 446) permitted disclosure required by law.
- Across the 607 NDAs, 61.9% (376 of 607) were annotated as entailing that the recipient may develop similar information on its own and 74.8% (454 of 607) that it may acquire similar information from a third party. A further 65.6% (398 of 607) were annotated as entailing a duty to notify the discloser when law, regulation or judicial process compels disclosure, which measures the notice duty rather than the existence of a compelled-disclosure exclusion.
- The corpus splits on marking and most of it says nothing. Of the 607 NDAs, 22.1% (134 of 607) were annotated as entailing that all confidential information must be identified by the discloser, 26.0% (158 of 607) as contradicting it, and 51.9% (315 of 607) did not address it.
- Residuals language is present and uncommon. At least 4.6% of the 607 NDAs (28 of 607) permitted continued use of information retained in a person's unaided memory, and in the comparison population of 446 employment confidentiality agreements 4% (18 of 446) carved out general knowledge, skill and experience.
- In the comparison population of 446 employment confidentiality agreements, 79% (352 of 446) provided that the employer could obtain injunctive relief and 60% (267 of 446) provided that disclosure or use constitutes irreparable harm. Across the 607 NDAs, Aline found injunctive, equitable or specific-performance relief mentioned in 66.7% (405 of 607) of documents but no irreparable-harm language in 32.5% (197 of 607), a document-level co-occurrence rather than a clause-level one.
- Riders travel with deal-process NDAs. The non-solicit hypothesis was entailed in 45.7% of the 232 SEC-sourced documents against 6.9% of the 375 web-collected documents, and the confidentiality-of-negotiation hypothesis in 51.7% against 30.4%. The two subsets are different populations, so this shows composition rather than a trend.
- No public source supports a mutual-versus-one-way percentage, and Aline's own proxies over the 607 documents disagreed too widely to publish: 24.7% of documents (150 of 607) carried mutual, two-way or bilateral wording in the title zone against 51.4% (312 of 607) somewhere in the text. Treat mutuality as a drafting choice.
Sources
- Yuta Koreeda and Christopher D. Manning, "ContractNLI: A Dataset for Document-level Natural Language Inference for Contracts," Findings of EMNLP 2021: aclanthology.org/2021.findings-emnlp.164. Dataset release, initial release 5 October 2021: stanfordnlp.github.io/contract-nli. The percentages attributed to this corpus on this page are Aline's own count over the corpus annotations, not figures published by Koreeda and Manning. The corpus is licensed CC BY 4.0 and the bundled terms name Hitachi America, Ltd. as the dataset owner.
- Camilla A. Hrdy and Christopher B. Seaman, "Beyond Trade Secrecy: Confidentiality Agreements that Act Like Noncompetes," 133 Yale Law Journal 669 (2024): read the PDF.
- 18 U.S.C. Sec. 1833, Exceptions to prohibitions, Legal Information Institute: law.cornell.edu/uscode/text/18/1833.
Method note
The ContractNLI figures on this page are Aline's own count over a public annotated corpus, not figures published by the corpus authors. The dataset is ContractNLI (Koreeda and Manning, Findings of EMNLP 2021), 607 NDAs comprising 232 SEC EDGAR filings and 375 PDFs collected by web search, licensed CC BY 4.0. Aline counted the expert annotations for each hypothesis across all 607 documents and reports the count with its denominator.
Read three limits with every ContractNLI figure. The corpus is a convenience corpus rather than a random sample of commercial NDAs. Its SEC subset spans accession years 1996 to 2019 with a median filing year of 2004, and the 375 web-collected documents disclose no execution date, so no figure here describes current market practice. And a document counts against a share when its text did not address the hypothesis, which makes each share a floor.
Figures marked "at least" come from pattern matching over the full text rather than from the expert annotations, so they undercount by an unknown margin. The duration figures come from a seeded random subsample of 60 documents that Aline hand coded, and the median rests on the 23 documents in that subsample that stated a number.
The 446-agreement figures come from a separate population. Hrdy and Seaman coded employment confidentiality agreements disclosed in federal trade-secret litigation and excluded business-to-business contracts on the grounds that those agreements differ in purpose, scope and the parties' relative bargaining power. The authors also record that litigation selection means their agreements may not be representative of those in the marketplace. Aline does not present those figures as commercial-NDA rates.
Two measurements failed and no number appears on this page for either. Aline could not measure mutuality, and Aline could not measure the public-domain or prior-possession exclusions reliably enough to publish a rate. Aline also declines to publish a DTSA-notice adoption rate: the corpus largely predates the May 2016 statute.
The table gives drafting positions, not survey results. No row states a market rate.
| Issue | Market posture | Reasonable fallback | Push back hard |
|---|
| Mutuality | State whether each party is bound as both discloser and recipient. No public source supports a mutual-versus-one-way rate, so treat this as a drafting choice | Where the obligations run one way, tie that to the party actually disclosing | One-way obligations in a deal where both sides will disclose |
| Period and anchor | Fix the number of years and the date the clock starts, and say whether the period runs from each disclosure, the effective date, or termination | Use a shorter period measured from each disclosure, or a longer one measured from the effective date | A number of years with no stated anchor, or silence on the period |
| Trade secrets | Decide whether trade secrets sit outside the general period, and say which formulation applies | Run the carve-out for as long as the information qualifies as a trade secret under applicable law | A carve-out with no endpoint that covers all confidential information rather than trade secrets |
| Exclusions | Name each excluded category: public domain, prior possession, independent development, third-party receipt without a duty of confidence, and compelled disclosure | Accept a narrower prior-possession exclusion supported by contemporaneous records | A definition with no exclusions, or a general public-information carve-out standing alone |
| Marking | Choose one regime and make it workable. Limit the definition to marked information, or cover everything disclosed | Where the definition is marked-only, add a route for oral disclosures identified at the time and confirmed in writing | A marking requirement with no oral-disclosure route, which leaves the discloser's spoken disclosures unprotected |
| Return and retention | Pair the return-or-destroy duty with a written retention exception for archival backups and legal holds, and say retained copies stay confidential | Certify destruction of accessible copies and leave backups in place until they expire on their own cycle | An unqualified destroy-everything duty with a certification requirement and no exception |
| Remedies | Decide whether the clause acknowledges irreparable harm and injunctive relief, and whether that acknowledgment is mutual | Acknowledge that the discloser may seek injunctive relief without conceding that any breach causes irreparable harm | A one-sided recital that also waives the other party's right to contest the facts |
| DTSA notice | Where the counterparty is an individual, including a contractor or consultant, include the 18 U.S.C. Sec. 1833(b) whistleblower-immunity notice | Cross-reference a policy document that sets out the reporting policy for a suspected violation of law | Omitting the notice, which costs the trade-secret owner exemplary damages and attorney fees against that person |
