The legal implications of a confidentiality, nondisclosure, and secrecy agreements under Dutch law include the obligation not to disclose confidential information and may result in legal consequences if breached. For example, in the context of an internship agreement, the intern must comply with the confidentiality obligation and submit work papers in advance for review for confidential information. Breach of confidentiality may be considered a serious breach of duty and may result in criminal prosecution. The court cannot judge whether the duty of confidentiality has been lawfully imposed, but only whether it formally complies with the law.
The principle of legality requires that the duty of confidentiality be established carefully and in accordance with legal requirements. In some cases, such as disciplinary proceedings, individuals may be required to sign a confidentiality agreement to ensure confidentiality. Failure to produce confidential documents may result in legal action. In the healthcare sector, confidentiality means that healthcare providers should not share confidential information about patients with anyone other than the patient. While respecting the duty of confidentiality, it is possible to share general and anonymized information, provided it is done carefully and with sufficient safeguards.
Key Elements of Confidentiality Agreements in the Netherlands
- Parties Involved
- Disclosing Party: The entity or individual sharing confidential information.
- Receiving Party: The entity or individual receiving the confidential information and agreeing to keep it secret.
2. Types of Obligations
- Unilateral: Only one party discloses confidential information.
- Mutual: Both parties disclose confidential information to each other.
3. Definition of Confidential Information
- General Description: Broad terms covering various types of information.
- Specific Description: Detailed and precise information.
- Marking: Explicitly labeling information as confidential.
4. Exclusions Clause
- Information that is already known, becomes public, is received from a third party, or is independently developed is typically excluded from confidentiality obligations.
5. Intellectual Property (IP) Ownership
- Each party retains ownership of its confidential information, and no licenses or rights are implied unless explicitly stated.
6. Penalty clauses under Dutch law
- The consequences of a breach of a contractual penalty in combination with confidentiality may be that one party forfeits an immediately payable penalty to the other party. This is a typical Dutch instrument. The amount of this penalty is usually fixed at a certain amount per breach, which is increased by an amount for each day that the breach continues. In addition, the contracting party does not have to prove any loss or damage in order to claim the penalty. The other party usually retains the right to seek performance of the contract, injunctive relief and/or damages if the damages exceed the amount of the penalty, and may often seek immediate termination of the contract. For the purpose of calculating the penalties due, (in a proper contract) each disclosure of trade secret information should be considered as a separate breach, unless several communications or acts on the same day or within a short period of time and on the same subject are considered as one act. The duty of confidentiality, and therefore the possibility of forfeiting penalties, continues after the termination of the contract.
7. Term of Obligation
- Confidentiality obligations typically extend beyond the termination of the relationship and last as long as the information remains confidential.
8. Duty to Protect Information
- The Receiving Party must take reasonable measures to protect the confidential information, which could include physical security or digital protections.
9. Permitted Disclosures
- Specific instances where disclosure is allowed, such as court orders, should be clearly outlined, often requiring prior notice to the Disclosing Party.
10. Return or Destruction of Information
- Upon termination of the relationship, the Receiving Party must return or destroy all confidential information.
11. Assignability
- Confidentiality agreements generally prohibit assignment to third parties without consent.
12. Non-Solicitation
- Clauses preventing the solicitation of employees, customers, or suppliers may be included.
13. Governing Law
- The agreement typically specifies the applicable law, often that of the Disclosing Party’s jurisdiction.
14. Boilerplate Clauses
- Standard clauses such as arbitration, costs and attorneys’ fees, counterparts, entire agreement, force majeure, headings, indemnity, jury trial waivers, notice, publication, severability, and venue.
Limitations and Remedies under Dutch law
- Enforceability: The agreement is only enforceable against the parties bound by it.
- Court Challenges: The effectiveness of the agreement depends on judicial interpretation and the ability to prove the confidential nature of the information.
- Reasonableness: Courts will assess the reasonableness of the agreement based on factors like the interests of the Disclosing Party, the duration of confidentiality, the burden on the Receiving Party, and public interest.
- Acknowledgement of Irreparable Harm: Including clauses that acknowledge irreparable harm can strengthen the agreement.
- Liquidated Damages: Pre-determined damages for breaches can act as a deterrent but may affect the ability to claim irreparable harm.
Conclusion
Confidentiality agreements under Dutch law are robust tools for protecting sensitive information in various business contexts. They must be carefully drafted to include essential clauses and consider the specific needs and circumstances of the parties involved. Legal advice is often recommended to ensure the agreements are tailored appropriately and enforceable under Dutch law.
Dutch law firm specialized in secrecy agreements
For any legal inquiries or support in the Netherlands, please feel free to contact our adept team at MAAK Advocaten. Committed to excellence, our Dutch lawyers provide superior legal services tailored to your distinct needs. You can reach our law firm in the Netherlands through our website, by email, or phone.
Our approachable and skilled staff at MAAK Attorneys will be delighted to assist you, arranging a meeting with one of our specialized attorneys in the Netherlands. Whether you need a Dutch litigation attorney or a Dutch contract lawyer in Amsterdam, we are eager to guide you through the legal intricacies and secure the most favorable results for your situation.
Contact details
Remko Roosjen | attorney-at-law (‘advocaat’)
+31 (0)20 – 210 31 38
remko.roosjen@maakadvocaten.nl
The information on this legal blog serves purely for educational purposes and should not be taken as specific legal guidance. While we endeavor to maintain accurate and current information, we do not assert its absolute completeness or relevance to your particular situation. For advice tailored to your legal concerns, we urge you to engage with a licensed attorney. Please note that the blog’s content may change without notice, and we are not liable for any inaccuracies or missing information.
