NDA in Canada: scope, duration and enforceability

Defining the information

Describe categories — technical data, pricing, customer lists, business plans — and cover every medium: oral, written and electronic. A marking requirement is workable only if oral disclosures are confirmed in writing afterwards.

Include the standard carve-outs: information already public, independently developed, lawfully received from a third party, or required to be disclosed by law or court order, ideally with notice to the disclosing party where permitted.

State the permitted purpose. It limits use more effectively than any list.

1. 1.Decide whether the obligation is one-way or mutual.
2. 2.State the purpose for which information is shared.
3. 3.Define confidential information by category and set the exceptions.
4. 4.Fix a duration proportionate to the sensitivity of the information.
5. 5.Require return or destruction, including copies and backups.
6. 6.Sign before information changes hands, so consideration is clear.

Duration and remedies

Three to five years after the relationship ends is typical, longer for technical know-how. An indefinite obligation over ordinary commercial information invites an argument about reasonableness.

Because damages for a leak are hard to prove, the practical remedy is an injunction. Including an acknowledgment that breach would cause irreparable harm helps, though the court still decides on the evidence.

Employees and limits

Employees already owe duties of confidence, and senior employees may owe fiduciary duties that survive employment. An NDA can clarify those obligations but cannot function as a disguised non-compete — Ontario prohibits non-competes for most employees, and elsewhere they are enforced only where reasonable.

Confidentiality obligations also cannot prevent reporting unlawful conduct to regulators or law enforcement.