This form is a "Residuals" Clause for Basic Nondisclosure Agreement usable in agreements regarding nondisclosure of licensing, patents, or commercial trade secrets. The residuals clause allows some disclosures of confidential information under certain limited circumstances.
The Massachusetts Residuals Clause is an essential component of a Basic Nondisclosure Agreement (NDA) in the state of Massachusetts. This clause primarily addresses the issue of preserving and protecting confidential information that may remain with the receiving party even after the termination or expiration of the NDA. The Residuals Clause ensures that any residual knowledge or information retained by the receiving party through lawful means, such as memory or experience, is still bound by the terms of the NDA. It prevents the recipient from using or disclosing this residual information for any purpose other than what was agreed upon in the NDA. In Massachusetts, there are two common types of Residuals Clauses used in Basic Nondisclosure Agreements: 1. Broad Residuals Clause: This type of clause is more comprehensive and offers greater protection to the disclosing party. It states that the receiving party may retain and use any residual information acquired during the course of their engagement with the disclosing party, but only within the scope of the original agreement. The clause explicitly prohibits the recipient from using the residual information to compete with the disclosing party or disclose it to any other third party. 2. Limited Residuals Clause: This variation of the Residuals Clause is more restrictive compared to the broad clause. It allows the receiving party to retain and utilize only the residual information that can be reasonably demonstrated to have been acquired without any violation of the NDA. Any other confidential information that has not become part of the recipient's general knowledge or experience is not covered by the Limited Residuals Clause. It is important for both parties involved in a Basic Nondisclosure Agreement in Massachusetts to carefully consider the appropriate Residuals Clause that best suits their needs. The clause should be tailored to strike a balance between protecting the disclosing party's confidential information while still allowing the receiving party to utilize residual knowledge in a limited and agreed-upon manner. By incorporating a well-drafted Residuals Clause into a Basic Nondisclosure Agreement, parties can ensure the continued protection of confidential information, even after the termination or expiration of the agreement. This clause serves as a crucial safeguard against any inadvertent disclosure or misuse of residual information, providing peace of mind to both parties involved.
