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No. 55Legal & Compliance
Also called NDA, non-disclosure, confidentiality clause, non-disclosure agreement
Restrictions on either party disclosing the terms or existence of the deal to third parties.
Watch closely
One-sided confidentiality that prevents artists from sharing terms with advisors creates information asymmetry.
A confidentiality clause prevents one or both parties from disclosing the deal's terms, royalty rates, advances, and specific provisions, to third parties. Labels typically insist on confidentiality to prevent artists from using deal terms as leverage in negotiations and to maintain information asymmetry in future signings.
Artists often cannot tell their own advisors about deal terms without triggering the confidentiality clause. This impedes informed negotiation in future deals and prevents collective knowledge about industry standards from spreading among artists.
The same clause is drafted three ways. These are the positions we see, worst first, so you can tell at a glance which one is in front of you.
The drafting language and the negotiation moves for this clause are part of the workspace.
You have read what the clause means and where the risk sits. The rest is the side-by-side of how it reads when it is against you and when it is not, plus the specific moves that get it there.