It starts with two names.
No preamble and no ‘whereas’. The agreement opens by saying who promises what to whom — and because it is mutual, you both make the same promise. Watch the document: Acme Freight Pty Ltd in Eagle Farm, which moves containers out of the Port of Brisbane, and Southerly Telemetry Pty Ltd in Fortitude Valley, which builds the software that tracks them, are being filled in now.
THE ACN: A COMPANY MUST SET OUT ITS AUSTRALIAN COMPANY NUMBER WITH ITS NAME, ON THE FIRST PAGE THAT NAMES IT (CORPORATIONS ACT 2001, S 153). THE AGREEMENT LEAVES A LINE FOR THE PEN BESIDE EACH COMPANY’S NAME.
It protects what you forgot to label.
Most leaks were never stamped ‘confidential’ — someone said it out loud in a meeting. The definition’s tail, ‘or a reasonable person in the Recipient’s position would understand it to be confidential’, covers what you never got round to marking.
THE COURTS ASK THE SAME: WHETHER INFORMATION WAS GIVEN IN CONFIDENCE CAN BE JUDGED BY WHAT A REASONABLE PERSON IN THE RECIPIENT’S SHOES WOULD HAVE REALISED (THALES V MADRITSCH [2022] QCA 205). MARK WHAT MATTERS ANYWAY.
It says what they cannot do with it.
Not passing it on is only half the job. ‘Only for the Purpose’ stops the other side quietly using your rates, your routes or your customer list for anything beyond the pilot you are actually discussing.
WHAT IT NEVER STOPS: REPORTING A SUSPECTED OFFENCE, TALKING TO A REGULATOR OR A LAWYER, OR A WHISTLEBLOWER’S PROTECTED DISCLOSURE — NO CONTRACTUAL REMEDY CAN BE ENFORCED FOR ONE (CORPORATIONS ACT 2001, S 1317AB). CLAUSE 6.2 SAYS SO.
It knows when to end, and what it never covers.
An agreement that lasts for ever sounds strong, but it is harder to sign and harder to defend. Acme and Southerly chose three years from the last signature. And the agreement never binds information that is public: in a confidentiality deed governed by Queensland law, the High Court held duties that went on binding published information to be restraints of trade, invalid unless justified as reasonable.
THE CASE: MAGGBURY PTY LTD V HAFELE AUSTRALIA PTY LTD [2001] HCA 70. YOUR CHOICE: TWO, THREE OR FIVE YEARS — THE FORM SAYS WHEN EACH FITS.
It says what a breach costs.
Some NDAs fix a sum for a breach. This one does not, on purpose: a sum agreed in advance is a penalty, enforced only to the extent of the loss, if it is out of all proportion to the interest it protects — and a template cannot weigh that for your information. What stays is what the courts give: an injunction to stop a leak, the usual remedy for a breach of confidence, and damages for the loss.
WHY NO AGREED SUM: ANDREWS V ANZ [2012] HCA 30; PACIOCCO V ANZ [2016] HCA 28. AND IN A SMALL BUSINESS’S STANDARD-FORM CONTRACT, A TERM THAT PENALISES ONE PARTY BUT NOT THE OTHER FOR A BREACH MAY BE UNFAIR, AND AN UNFAIR TERM IS VOID (AUSTRALIAN CONSUMER LAW, SS 23 AND 25(C)).
And it ends in ink.
That is the whole agreement. Four pages with the guide, nothing you could not explain to the person signing across the table. Acme and Southerly each sign by two directors, electronically. You have just executed it by scrolling — imagine how quickly the real one gets signed.
HOW A COMPANY SIGNS: BY TWO DIRECTORS, A DIRECTOR AND THE COMPANY SECRETARY, OR THE SOLE DIRECTOR OF A PROPRIETARY COMPANY WITH NO OTHER COMPANY SECRETARY (CORPORATIONS ACT 2001, S 127) — ON PAPER OR ELECTRONICALLY, AND NOT NECESSARILY ON THE SAME COPY (S 110A).
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