Effect of backdating a contract

Another tricky situation with backdated non-disclosure agreements is the possibility that the Recipient Party of your confidential information failed to inform its representatives or third parties of their confidential duties prior to signing the agreement.In other words, before the agreement with the retroactive date is signed, there’s no contractual obligation for the Recipient Party to maintain confidentiality.We can’t prevent something that’s already happened. First, be aware that asking a party to sign a NDA with a retroactive date is considered “bush league” to some in the legal world and may not be taken lightly by the party on the other end.

Let’s say, for example, that you were discussing your technology with prospective investors prior to the technology actually being developed. ) Now you’re ready to move forward with one of the investors and you’re wondering if you should have the agreement signed. S., however, will offer a horde of results proving that business owners and courts, alike, have considered the topic in detail and rulings on the matter continue to shape their use and handling.

That’s a complex question which won’t be answered in full here, but for the purposes of our topic, this would be a reasonable time to draft an agreement with a retroactive date in order to include the disclosures that took place prior to the investment being finalized. The takeaway, here, is to be sure and check the laws in your jurisdiction as well as common practice.

There are a number of things that can go wrong when signing a non-disclosure agreement with a retroactive date. One possible snag in signing a backdated agreement is the potential for a breach upon signing.

When drafting the backdated non-disclosure agreements, be very careful to ensure that none of the obligations would be impossible to meet or perform after the signing of the agreement.

Hindsight is always 20/20 and so it goes in the professional world, as well.

Sometimes our mouths move faster than our brains and business moves faster than our keyboards.

Even if they intended to be cautious and fair with your information, they may not have handled it like truly “” information because they weren’t yet under a contractual obligation to do so.

When drafting the agreement, be sure to have candid conversations with the other party about what may have already been disclosed prior to the agreement being signed.

One of the most straightforward ways to backdate the agreement is to not backdate it at all. If you’ve already disclosed proprietary or confidential information but you’re ready to confidently move forward with the other party and all necessary conversations have taken place, one option is to draft the non-disclosure agreement with an identical effective and execution date, as is usual, but include a clause that covers past disclosures.

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