Compelled Disclosure
Contract Type:
Generic Contract

Compelled Disclosure: Notwithstanding any other provision of this Agreement, either party may disclose Confidential Information of the other party if and to the extent that it is required to do so by law, by any governmental or other regulatory authority or by a court or other authority of competent jurisdiction, provided that, so far as it is legally permitted to do so, it gives the other party as much notice of the disclosure as possible and, where notice of disclosure is not prohibited and is given in accordance with this clause, it takes into account the reasonable requests of the other party in relation to the content of the disclosure.

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Here is a plain English explanation of the Compelled Disclosure clause:

This clause allows either party to reveal confidential information they have received from the other party if legally required to do so. For example, if ordered by a court, governmental body, or regulatory authority.

The party being compelled to disclose the information must give as much advance notice to the other party as possible. They should also take into account any reasonable requests from the other party regarding what specifically will be revealed.

However, notice is not required if prohibited by law. For instance, if a legal gag order is in place.

In summary, this clause permits confidential data to be disclosed only when truly necessary for legal compliance purposes.

The disclosing party should provide a heads up and accommodate requests if possible. But the legal mandate takes priority.

History of the clause (for the geeks)

The compelled disclosure clause has its origins in the need to balance confidentiality with legal obligations of disclosure.

Key aspects of its emergence and evolution include:

In the 19th century, common law duties of confidentiality developed in England around trade secrets and privacy. However, courts also upheld that no contract could prevent complying with the law.

By the mid-20th century, compelled disclosure exemptions appeared in standard form contracts to clarify parties' duties when confidentiality conflicted with legal demands.

As data privacy concerns grew with computing, compelled disclosure clauses became vital in technology services and outsourcing deals to allow legal access to data.

Notice requirements emerged as disclosing parties were expected to resist overbroad disclosure demands when possible and inform others impacted.

Over time, more sophisticated compelled disclosure clauses developed with specific exceptions and carveouts. Customized language responded to different disclosure triggers.

Today these clauses balance strong confidentiality with unavoidable disclosures across sectors like healthcare, financial services and national security. Privacy laws have further shaped obligations.

In summary, compelled disclosure clauses evolved from common law duties into standardized provisions delineating confidentiality and lawful compulsion.

They remain critical in enabling compliance amidst growing data use.