The Recipient shall use the Confidential Information solely for the Purpose and shall not use the Confidential Information for any other purpose."
This clause restricts how the receiving party can use shared confidential information:
- The recipient can only use the confidential data for the agreed purpose in the contract.
- They cannot use it for any other reason or objective.
- The confidential data can only be utilized to achieve the intended purpose that both parties consented to.
In plain terms, this clause ensures the recipient uses the sensitive information in good faith solely for the mutually understood purpose, and not for unrelated reasons without permission.
It limits use of the data to align with the discloser's intentions for sharing it.
The unrestricted use of shared confidential information originally posed problems in agreements.
Recipients could potentially employ it for competitive or improper purposes beyond the discloser’s intent and comfort levels. This undermined productive business collaborations and data sharing.
Parties began inserting use restrictions to permit access only for defined purposes. This provided disclosers control over how recipients applied the sensitive information. Limiting application to a specific context or objective prevented exploitative misuse.
Such clauses became best practice to enable confidential data transfers for circumscribed needs without concern over unintended downstream usage. They upheld expectations and maintained trust in sharing for delineated projects or transactions.
Over time, delineating acceptable use became integral to prudent confidentiality contracts. Permitted purpose provisions uphold discloser interests when exposing valuable IP or trade secrets. Recipients gain access for that defined scope while dishonest diversion of the same data is foreclosed. This balance enables parties to confidently collaborate.
In essence, authorized use clauses evolved to facilitate secure, context-specific data sharing.
They serve to prevent exploitation beyond intended applications that could undermine the discloser's interests and trust.