Permitted Disclosees - Definition and Exclusions

Contract Type:
Generic Contract

For the purposes of this Agreement, "Permitted Disclosees" means: (a) the parties to this Agreement; (b) the employees, directors, agents, consultants and professional advisors of the parties, who need to know the Confidential Information for the purpose of discharging their duties under this Agreement; (c) any person to whom disclosure is required by law or regulation; and (d) any person to whom disclosure is required for the purpose of any litigation or arbitration arising out of this Agreement. Disclosure to any other person or for any other purpose shall not be permitted unless the prior written consent of the Disclosing Party has been obtained.


Here is a plain English explanation of the Permitted Disclosees clause:

- This clause defines who can receive confidential information shared under the contract.

- The parties to the contract can share confidential information with each other.

- They can also share it internally with employees, agents, consultants, etc. who need it to perform their jobs under the contract.

- Confidential information can be disclosed when required by law or regulation without permission.

- It can also be disclosed when needed for any lawsuits or arbitration related to the contract.

- Beyond those listed, confidential information cannot be shared with any other person or for any other reason unless the party who owns the information provides written approval first.

- The purpose is to protect confidentiality while allowing necessary disclosures for the contract's performance and related legal proceedings.

- It provides clear parameters on who has access to sensitive information.

History of the clause (for the geeks)

The concept of limiting disclosure of sensitive information has existed for centuries, as governments, militaries, and merchants sought to protect their secrets.

Ancient Roman law encoded obligations of confidentiality for certain professions like lawyers. In the Middle Ages, trade guilds established strict rules to safeguard proprietary methods. The rise of patent law formalized protections for inventions and intellectual property.

By the 1800s, confidentiality was an established part of contract law. Courts enforced non-disclosure agreements between businesses developing new technologies and processes. The growth of large corporations increased business reliance on confidentiality to guard competitive advantages. Complex distribution networks and partnerships necessitated nuanced confidentiality obligations for different parties.

In the modern era, information security and data privacy concerns have heightened confidentiality practices. Firms utilize specialized legal expertise to craft bespoke definitions of permitted disclosees tailored to their industry and relationships. The pervasive nature of information technology has led to ever more detailed contractual controls over access, use, and disclosure.

Overall, the evolution of confidentiality clauses reflects their crucial role in allowing constructive sharing of sensitive information while providing legal recourse if it is improperly disseminated.

As information growth and technology persist, such clauses will continue developing to meet emerging needs.