The Receiving Party shall not contact or communicate with any customer, supplier, employee or other business contact of the Disclosing Party regarding any Confidential Information, except with the prior written consent of the Disclosing Party."
The Receiving Party is prohibited from contacting or communicating with any of the Disclosing Party's customers, suppliers, employees, or other business contacts about any Confidential Information unless the Disclosing Party provides prior written approval.
In other words, the Receiving Party cannot reach out to people or companies that the Disclosing Party works with to discuss any proprietary or sensitive information disclosed between the parties, unless the Disclosing Party gives written permission first.
This prevents unauthorized sharing of confidential data
Non-contact and non-disclosure clauses have long been used in business agreements to protect confidential information and trade secrets.
Early versions of these clauses can be traced back to the 19th century during the Industrial Revolution, when companies sought legal protections for their inventions and manufacturing processes which gave them competitive advantage.As companies expanded internationally in the early 20th century, there was greater need to share proprietary information with overseas agents and partners. This led to more formal non-disclosure agreements being drafted with restrictions on contacting business partners and disclosing sensitive information. By the 1970s and 80s, non-disclosure clauses became a standard part of business contracts as technology started playing a bigger role in commerce. With the rise of high technology industries, Silicon Valley, and venture capitalism in the 1980s and 1990s, the importance of proprietary tech and protecting trade secrets became paramount. This led to more complex and expansive non-disclosure clauses as standard practice in business deals, licensing, joint ventures and other collaborations where sharing of confidential data is required.
Today, non-contact and non-disclosure clauses continue to evolve as companies find new ways to conduct business globally and navigate data protection regulations. However, the basic premise of limiting disclosure of confidential information and restricting contacts remains unchanged from the early intentions of these contract clauses.