Answered question · Dec 14, 2025
Is perpetual confidentiality with injunctive relief a red flag?
An anonymized real-world question about commercial contract risk. This breakdown focuses on practical, commercial impact — not case law, and not a substitute for a full contract review.
Plain-English snapshot
When evaluating a non-disclosure agreement (NDA) that includes perpetual confidentiality obligations and allows for injunctive relief withou
Full commercial-risk breakdown
When evaluating a non-disclosure agreement (NDA) that includes perpetual confidentiality obligations and allows for injunctive relief without posting a bond, it’s important to consider the commercial implications and risks involved. Key Considerations: **Aggressiveness of Terms:** - Perpetual confidentiality can be seen as beyond a market standard with respect to confidentiality protections. It places a long-term burden on your organization to protect information indefinitely, which may not always be feasible or practical and, depending on the information being protected, costly. - The lack of a distinction between trade secrets and general confidential information can lead to broader obligations than necessary, increasing your risk exposure. Under law, trade secrets shall be kept confidential indefinitely, as long as they remain a secret and provide economic value. Compare that to other types of confidential information (product strategies, business plans, pricing lists, etc.) which are typically held confidential for anywhere in between 2-7 years (for example: a pricing list for Coca-Cola products might not have relevance five years from now, but the formula for making Coca-Cola? That will have value as long as its not publicly shared). **Legal Risks:** The potential for injunctive relief without a bond means you could face immediate legal action without the opportunity to contest it financially, and you may be left without any money to recoup costs, in the event the granted injunction was improper and is reversed. - **Negotiation Leverage:** Such terms may weaken your negotiating position in future agreements, as they set a precedent for how confidentiality is handled. **Negotiation Angles:** - Propose a defined time frame for confidentiality obligations to mitigate long-term risks. - Suggest distinguishing between trade secrets and other confidential information to limit the scope of obligations. - Consider negotiating for a mutual agreement on injunctive relief that includes a bond requirement to protect against potential misuse. **Next Steps:** - Assess your organization's capacity to manage perpetual confidentiality. - Evaluate the specific information being shared and its relevance over time. - Prepare to negotiate terms that align with industry standards while protecting your interests. Not legal advice.
Original question (anonymized)
The NDA section requires confidentiality obligations to survive forever and explicitly allows the customer to seek injunctive relief without posting bond. There’s no distinction between trade secrets and general confidential information. From a commercial risk standpoint, how aggressive is this? What downsides should we be thinking about long-term, and are time-limited confidentiality obligations more common in SaaS or services deals?