Disclosure Definition Law: Everything You Need to Know
Disclosure definition law defines and governs the protection or provision of information in a contract or a transaction concerning an entity.3 min read
Disclosure definition law defines and governs the protection or provision of information in a contract or a transaction concerning an entity. It is also the law that regulates the filing and management of statements and documents bearing such information.
A Nondisclosure Agreement
A nondisclosure agreement is an example of a disclosure contract that a disclosure definition law defines and governs. A nondisclosure agreement, which is also referred to as an NDA or a confidentiality agreement, requires parties to promise to treat particular business information as secret and not reveal it to others without proper permission.
A nondisclosure agreement is typically used when there is a need to reveal a business secret to another party for reasons such as:
- Securing financial backing.
Nondisclosure agreements won't protect business secrets if the business secret owners don't take reasonable steps to keep their information properly guarded.
A Full Disclosure Agreement
A full disclosure agreement is another example of a disclosure contract that a disclosure definition law defines and regulates. A full disclosure is a lawful requirement in different transactions such as premarital agreements, real estate deals, and etc., which try to find ways to balance the power of negotiation for the transacting parties to have equal possession of all required information.
It's a legal requirement for the whole truth to be told before a contract is signed or a purchase is made so that all transacting parties will be fully aware of the consequences of their decision. For example, many courts demand that the parties signing a premarital agreement provide full disclosure concerning their assets. Typically, there's an attachment of a schedule of assets to an incorporated premarital agreement as evidence that full disclosure was made and that parties knowingly signed the agreement without deceit.
Duties of Disclosure
The party that doesn't comply with its disclosure duties can have severe sanctions imposed on them by the court. Therefore, parties are requested to discuss issues of disclosure with other transacting parties with the aim of reaching an agreement on disclosure that will satisfy the requirements of proportionality and justice.
The duty to disclose information arises from either the parties' agreement or a court order, selected from a menu of disclosure orders with the following:
- Order to disclose a document a party relies on, and the request of any particular disclosure needed from the opponent.
- Order to do without disclosure.
- Order to disclose documents, one issue at a time.
- A standard disclosure order.
The order for disclosure selected will be the appropriate one for the complexity, nature, and size of the case, by reference. Deciding whether a document ought to be disclosed will be done by reference to the raised issues in the parties' statement of case.
What Documents Should be Disclosed
The duty of document disclosure extends to documents within the control of a party, including documents that are or were in the physical possession of the party, which the party had the right to keep or had the right to inspect. It also includes documents in an employee's possession or the possession of an agent controlled by a party.
Disclosure may or may not include documents held by:
- Professional agents
- Subsidiary companies
- Former employees.
In disclosure requirements, “document” is not limited to information written on paper or original copies. It includes electronically stored information (ESI) as well. Usually, there'll be ESIs that are related to a dispute, for instance, emails (including emails stored in a database and deleted emails).
More on ESIs
Other forms of ESI are any information storage media and their electronic documents such as:
- Audio files
- Video files
- Hard disks
ESI disclosure can include the attached metadata to each ESI document, which are data such as:
- The author of the document
- Date of creation
- Hidden notes.
Parties should take great care with ESIs because their records are easily changed by simple activities such as opening and printing a document. The moment there's a dispute, parties should make sure that related documents aren't destroyed or changed.
Full disclosure requires all relevant documents to be exposed, whether they're confidential or not. The only exception is if there is a “privileged” or sensitive information, which has little or no relevance to the dispute. Such information, if a part of other required information, should be edited to keep it secret.
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