Legal Question re Contracts & Confidentiality Agreements

Discussion in 'The Bench' started by 2manybuicks, Aug 16, 2019.

  1. 2manybuicks

    2manybuicks Founders Club Member

    The brother / cousin / brother-in-law / who knows of the guy running our office drew up a Non-Disclosure / Confidentiality Agreement for us to use when having contractors provide pricing in support of some of our bids.
    It is intended to, replace our old somewhat more bogus document.

    The new document states:
    "This contract is made and entered into this __day of ____ between OUR COMPANY NAME (hereinafter "US”) and THEIR COMPANY NAME (hereinafter “THE CONTRACTOR”); and/or assigns for Ten ($10.00) Dollars and 00/100 good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged and agreed as follows:

    BLAH BLAH BLAH BLAH BLAH"

    I asked what this ten dollars silliness was, and was told that ten dollars is the amount it takes to make the contract valid (in Florida or maybe everywhere, I suppose.)

    My questions are:
    1) Is that true?
    2) Why is this even a "contract"? All we need is an "agreement", right?

    I have NEVER seen a dollar amount in ANY NDA I have ever come across, so I fear whoever the family member was who wrote this was is an idiot. God knows I spent a full day rephrasing everything else he wrote.

    Please advise.
     
  2. flynbuick

    flynbuick Guest

    The legal term is consideration. Passing of consideration is an element of a contract.
     
  3. jmos4

    jmos4 Well-Known Member

    Hi,

    A nondisclosure and a confidentiality agreement are legally very different.

    What I understand is a NDA is pretty standard and mean you won't share trade secrets. A CA on the other hand is designed for one buying a business and keeping the seller from starting up the same business they just sold with the same client list. Although lately I've seen them used in place of NDA's but allow a company to sue employee's for leaving and working for another competing company, very nasty document used in this way in my opinion.

    Not sure on your original question but you should clarify what you are using it for.

    Also CA's are illegal in some states making them meaningless.

    Regards,
     
  4. 2manybuicks

    2manybuicks Founders Club Member

    Its just an NDA, but the hack who wrote it now calls it a "Confidentiality, Nondisclosure, and Noncircumvent Agreement".

    Intended for a contractor to sign before we give them documents to help jointly bid a job.
     
  5. sriley531

    sriley531 Excommunicado

    Ive signed many a NDA, never seen the $10 stipulation. Interesting.
     
  6. 2manybuicks

    2manybuicks Founders Club Member

    The more I think about this the more issues I have with it.

    1) Until I send our contractor $10 and he acknowledges receipt of the $10, I doubt this thing is valid at all.
    2) Our accountant won't send the $10 until Wednesday. So do I have to wait until then to share info?
    3) How do we know when or if they recieved the check unless we send it by certified mail?
    4) Is the agreement valid when they get the check? when they deposit it? when it clears?
    5) Do we really want to keep sending people $10?

    The whole thing is stupid.
     
  7. flynbuick

    flynbuick Guest


    You are referencing something entirely different. The legal name is a “covenant not to compete.”
     
  8. John Codman

    John Codman Platinum Level Contributor

    This is frequently used for on-air television anchors. The employer doesn't want the news anchorperson who has developed a following due to the employer's efforts to go across the street and be on air at another station. It will specify a time period which as I recall is usually a year. It normally doesn't prevent the anchorperson from going on air in a different market such as moving from Chicago to New York.
     
  9. flynbuick

    flynbuick Guest

    The maximum time and geographic area legally permitted for these will vary from state to state. In NC they can last for several years.
     
  10. hvramesq

    hvramesq Silver Level contributor

    all agreements, which are essentially contracts, need consideration in order to be enforceable after a breach, someone does not meet their side of the bargain. when people do not want others to know monetary amounts, they use the $10 and good and other valuable consideration. some states, that's how a deed will read. in other states, you must specify the actual dollar amount, which becomes public information. if you don't send the $10, then you have breached and cannot sue for breach of contract because the other side does not have to perform until you do, i.e. pay the 10 dollars. so change the consideration to a non-monetary term, i.e. "in exchange for promise to participate in good faith in bidding process...."
     
  11. cluxford

    cluxford Well-Known Member

    I always see NDA, confidentiality agreement and non competes get confused mixed up and mis-used. In 20 years of signing hundreds of these including many in the US I have never seen an NDA with any monetary consideration in it. Why would you pay a contractor to share information with them. That defies logic
     
  12. 2manybuicks

    2manybuicks Founders Club Member

    I think the dude who wrote this NDA is more of a real estate lawyer than anything else. Working out-of-trade and this was the result.
     
  13. flynbuick

    flynbuick Guest

    Usually when you see money being paid like you set forth, the parties were previously doing business without a non disclosure agreement. Under this circumstance the person now wanting non disclosure protection cannot legally require this unless there is a new agreement under which monetary consideration is paid in return for a promise to not disclose certain information.
     

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