Confidentiality clauses are the cornerstone of any international negotiation. Without precise wording, the protection of sensitive information can vanish as soon as a conflict arises. This article examines the essential elements that every corporate lawyer must consider when drafting a non-disclosure agreement (NDA) in cross-border operations.

Definition of Confidential Information

The first challenge is to define what constitutes confidential information. In international contracts, the definition must be broad enough to cover technical, financial, and commercial data, but without falling into vagueness that renders it unenforceable. We recommend including an illustrative list and expressly excluding information that is already public domain or that the recipient can demonstrate they knew beforehand.

Duration of the Obligation

The term of confidentiality varies by jurisdiction and sector. While in Argentina the periods typically range from three to five years, in Brazil it is common to extend them up to ten years for industrial secrets. The drafter must assess the business lifecycle and the sensitivity of the information to set a reasonable term, keeping in mind that excessively long periods may be declared void by courts.

Permitted Exceptions

Every confidentiality clause must include exceptions: disclosures required by law, court or regulatory orders, and communications to legal and financial advisors bound by a duty of confidentiality. In the Andean region, the regulations of the Andean Community also require notifying the other party before any mandatory disclosure, so that they can seek a protective measure.

Jurisdiction and Applicable Law

The choice of forum is critical. A contract between an Argentine and a Mexican company may opt for New York or English law, but the cost of litigation in those jurisdictions can be prohibitive. A practical alternative is to subject the NDA to the law of the disclosing party's country and choose arbitration at the International Chamber of Commerce (ICC) seated in Buenos Aires or São Paulo.

Common Mistakes That Invalidate Protection

Among the most frequent errors are: not clearly defining the purpose of the disclosure, omitting the obligation to return or destroy the information upon termination of the agreement, and not including a confidentiality clause for the recipient's employees and subcontractors. Each of these oversights can be exploited in litigation to undermine liability.

Drafting an international NDA requires knowledge of local legislation and industry business practices. A well-structured agreement not only protects information but also builds trust between the parties and facilitates the negotiation of more complex contracts.