Protect Your Project’s Secrets: Mastering Confidentiality in FIDIC Clause 1.12

Clause 1.12: Confidentiality in the FIDIC Yellow Book 2017 (Conditions of Contract for Plant and Design-Build) establishes the obligations of the Contractor, Employer, and Engineer regarding the handling of confidential information related to the Contract. This clause is instrumental in safeguarding sensitive information, maintaining trust between parties, and ensuring compliance with contractual and legal obligations throughout the project’s execution.

Definition and Scope

Definition (Confidentiality & Confidential Information)

• Confidentiality: The obligation to protect sensitive information from unauthorized access, disclosure, or misuse. It involves respecting privacy and proprietary rights concerning data shared between parties.
• Confidential Information: Any information that is designated as confidential by the providing party or inherently sensitive due to its nature or context. This includes technical data, financial records, proprietary methodologies, and any details marked “confidential.”

Scope of Clause 1.12 (Confidentiality & Confidential Information)

• Contractor’s Obligations:
  • Disclosure to Engineer: The Contractor must provide all confidential and other information reasonably required by the Engineer to verify compliance with the Contract.
  • Treating Contract Documents as Confidential: The Contractor must treat all documents forming the Contract as confidential, except when disclosure is necessary to perform contractual obligations.
  • Restrictions on Publication: The Contractor must not publish or disclose any particulars of the Contract in any medium without the Employer’s prior consent.
• Employer’s and Engineer’s Obligations:
  • Handling Contractor’s Confidential Information: The Employer and Engineer must treat all information provided by the Contractor and marked “confidential” as confidential.
  • Limitations on Disclosure: The Employer must not disclose such confidential information to third parties, except when necessary under Sub-Clause 15.2 [Termination for Contractor’s Default].
• Exceptions to Confidentiality Obligations:
  • Pre-existing Information: Confidentiality does not apply to information already in a party’s possession without an obligation of confidentiality before receipt from the other party.
  • Public Domain Information: Information that becomes publicly available through no breach of the Contract is exempt.
  • Third-Party Information: Information lawfully obtained from a third party not bound by confidentiality obligations is not subject to confidentiality under this clause.

Key Aspects (Confidentiality & Confidential Information)

1. Mutual Confidentiality Duties:
   • Establishes reciprocal obligations for both the Contractor and the Employer (including the Engineer) to protect confidential information.
2. Reasonable Disclosure Requirement:
   • Enables the Engineer to request necessary confidential information from the Contractor to ensure compliance, provided such requests are reasonable.
3. Protecting Contract Details:
   • Prohibits the Contractor from publishing or disclosing Contract particulars without prior consent, safeguarding sensitive project information.
4. Marking of Confidential Information:
   • Emphasizes the importance of marking information as “confidential” to invoke protection obligations.
5. Exceptions Clarified:
   • Clearly defines situations where confidentiality obligations do not apply, reducing ambiguity.
6. Balance of Interests:
   • Aims to balance the need for transparency in verifying compliance with the protection of proprietary and sensitive information.

Purpose (Confidentiality & Confidential Information)

• Safeguard Sensitive Information: To protect proprietary, technical, commercial, and strategic information from unauthorized disclosure or misuse.
• Maintain Trust: To foster a trustworthy relationship between parties by ensuring confidential information is handled appropriately and respectfully.
• Ensure Compliance and Verification: To allow the Engineer access to necessary information to verify the Contractor’s adherence to the Contract’s terms without compromising confidentiality.
• Control Public Disclosure: To prevent unauthorized publication of Contract details that could harm either party’s interests, reputation, or competitive position.
• Clarify Obligations and Exceptions: To provide clear guidelines on confidentiality duties, including exceptions, to prevent misunderstandings and disputes.

Breakdown of Clause 1.12 (Confidentiality & Confidential Information)

1. Contractor’s Obligation to Disclose to the Engineer

• Disclosure Requirement:
  • The Contractor must provide confidential and other information as the Engineer may reasonably require.
  • Purpose: To verify the Contractor’s compliance with the Contract.
• Reasonableness Standard:
  • The Engineer’s requests must be justified and necessary.
  • Limits unnecessary or intrusive disclosure demands.

2. Contractor’s Duty to Maintain Confidentiality

• Confidential Treatment of Contract Documents:
  • All documents forming the Contract are to be treated as confidential by the Contractor.
  • Exception: Disclosure is permitted when necessary to carry out Contract obligations.
• Restrictions on Publication:
  • The Contractor must not publish or allow the publication of Contract particulars in any medium without the Employer’s prior consent.
  • Includes trade journals, technical papers, media outlets, and online platforms.

3. Employer’s and Engineer’s Duty to Maintain Confidentiality

• Confidential Treatment of Contractor’s Information:
  • Information provided by the Contractor and marked “confidential” must be kept confidential by the Employer and Engineer.
• Restrictions on Disclosure to Third Parties:
  • The Employer cannot disclose such confidential information to third parties.
  • Exception: Disclosure is allowed if necessary under Sub-Clause 15.2 [Termination for Contractor’s Default].

4. Exceptions to Confidentiality Obligations

• Information Already in Possession:
  • If a party already possesses the information without a confidentiality obligation, the duty does not apply.
• Publicly Available Information:
  • Information that becomes publicly available through no fault of the receiving party is exempt from confidentiality.
• Lawfully Obtained Information:
  • Information obtained legally from a third party not bound by confidentiality is not subject to the confidentiality obligation.

Critical Terms and Concepts

• Confidential Information:
  • Any data or documents marked “confidential” or inherently sensitive.
  • Includes technical designs, financial data, proprietary methods, and strategic plans.
• Reasonably Require:
  • A standard limiting the Engineer’s request for information to what is necessary and justified for compliance verification.
• Obligation of Confidentiality:
  • A contractual duty to protect certain information from unauthorized disclosure or use.
• Publish, Permit to be Published, or Disclose:
  • Any form of sharing information publicly or with unauthorized individuals or entities.
• Prior Consent:
  • Written approval from the Employer required before the Contractor can disclose Contract particulars.
• Third Parties:
  • Individuals or organizations not directly involved in the Contract or its execution.
• Sub-Clause 15.2 [Termination for Contractor’s Default]:
  • A provision allowing the Employer to terminate the Contract due to Contractor defaults, potentially necessitating disclosure of certain information.

Example Scenarios

Scenario 1: Engineer Requests Detailed Design Calculations

• Situation:
  • To verify Contract compliance, the Engineer requests the Contractor’s detailed design calculations, which include proprietary information.
• Application:
  • The Contractor is obligated to disclose the requested information as it is reasonably required by the Engineer.
  • The Contractor should mark the information as “confidential” to ensure it is protected.
• Outcome:
  • The Engineer must treat the information as confidential, and the Employer cannot disclose it to third parties.

Scenario 2: Contractor Wants to Share Project Success in Media

• Situation:
  • The Contractor wishes to feature the project in a trade magazine, highlighting innovative construction techniques used.
• Application:
  • The Contractor must obtain the Employer’s prior consent before publishing any particulars of the Contract.
• Outcome:
  • If the Employer consents, the Contractor may proceed. Without consent, publication would violate confidentiality obligations.

Scenario 3: Employer Receives Contractor’s Information from a Third Party

• Situation:
  • The Employer obtains information about the Contractor’s methods from a supplier not bound by confidentiality.
• Application:
  • Since the information was lawfully obtained from a third party without confidentiality obligations, the Employer is not bound by confidentiality under Clause 1.12.
• Outcome:
  • The Employer may use the information, but must ensure no contractual or legal restrictions apply.

Scenario 4: Information Becomes Publicly Available

• Situation:
  • A key technological process used in the project becomes public knowledge due to a patent publication.
• Application:
  • Confidentiality obligations no longer apply to this information as it is publicly available through no breach of the Contract.
• Outcome:
  • Both parties may discuss or utilize the information without violating Clause 1.12.

Scenario 5: Employer Discloses Confidential Information During Termination

• Situation:
  • The Employer terminates the Contract under Sub-Clause 15.2 due to the Contractor’s default and needs to disclose certain confidential information to a replacement contractor.
• Application:
  • Clause 1.12 allows the Employer to disclose confidential information as may be necessary when exercising rights under Sub-Clause 15.2.
• Outcome:
  • The Employer can disclose the necessary information to the extent required to complete the Works.

Investigating the Interactions of Clause 1.12: Confidentiality with Other Clauses in the FIDIC Yellow Book 2017

Clause 1.12: Confidentiality is a pivotal provision in the FIDIC Yellow Book 2017 that establishes the obligations of the Contractor, Employer, and Engineer regarding the handling and protection of confidential information related to the Contract. This clause doesn’t operate in isolation; it interacts with several other clauses, creating a comprehensive framework for safeguarding sensitive information while ensuring smooth contractual execution.

Let’s delve into how Clause 1.12 interacts with other clauses, exploring their shared effects, providing detailed explanations, and outlining the sequences of these interactions.

Key Interacting Clauses

1. Clause 1.10: Employer’s Use of Contractor’s Documents
2. Clause 1.11: Contractor’s Use of Employer’s Documents
3. Clause 3.7: Agreement or Determination
4. Clause 4.3: Contractor’s Representative
5. Clause 5.2: Contractor’s Documents
6. Clause 8.4: Advance Warning
7. Clause 15.2: Termination for Contractor’s Default
8. Clause 18.1: Exceptional Events
9. Clause 20.2: Claims for Payment and/or EOT
10. Clause 21.1: DAAB Appointment

Detailed Interactions and Shared Effects

1. Interaction with Clause 1.10: Employer’s Use of Contractor’s Documents

Shared Effect: Balancing Intellectual Property Rights and Confidentiality

• Clause 1.10 grants the Employer a license to use the Contractor’s Documents for specific purposes related to the Works.
• Clause 1.12 ensures that any confidential information within these documents is protected from unauthorized disclosure or misuse.

Elaboration:

• While Clause 1.10 allows the Employer to use the Contractor’s Documents, Clause 1.12 requires the Employer and Engineer to treat any portions marked “confidential” with discretion.
• This interaction balances the Employer’s need to use the documents with the Contractor’s right to protect proprietary or sensitive information.

Sequence of Interaction:

1. Preparation of Documents: The Contractor prepares documents, some of which contain confidential information.
2. Marking Confidentiality: The Contractor marks sensitive sections as “confidential.”
3. Employer’s Use: Under Clause 1.10, the Employer uses the documents for permitted purposes.
4. Confidentiality Obligations: Clause 1.12 obligates the Employer to maintain confidentiality of marked information.

2. Interaction with Clause 1.11: Contractor’s Use of Employer’s Documents

Shared Effect: Mutual Confidentiality Obligations

• Clause 1.11 allows the Contractor to use the Employer’s documents for the purpose of executing the Works.
• Clause 1.12 requires the Contractor to treat these documents as confidential, mirroring the Employer’s obligations.

Elaboration:

• The Contractor must safeguard the Employer’s proprietary information, ensuring it’s not disclosed or misused.
• This reciprocity fosters trust and protects both parties’ interests.

Sequence of Interaction:

1. Provision of Documents: The Employer provides documents to the Contractor.
2. Use of Documents: The Contractor uses them for the Works as permitted.
3. Confidentiality Compliance: Clause 1.12 mandates the Contractor to maintain confidentiality.

3. Interaction with Clause 3.7: Agreement or Determination

Shared Effect: Confidentiality in Dispute Resolution

• Clause 3.7 outlines the Engineer’s role in facilitating agreements or making determinations on contractual matters.
• Clause 1.12 ensures that any confidential information disclosed during this process remains protected.

Elaboration:

• Parties may share sensitive information to support their positions.
• The Engineer, bound by Clause 1.12, must handle such information discreetly.

Sequence of Interaction:

1. Disagreement Arises: Parties invoke Clause 3.7.
2. Disclosure of Information: Confidential data is shared to aid resolution.
3. Confidentiality Maintained: All parties, including the Engineer, adhere to Clause 1.12.

4. Interaction with Clause 4.3: Contractor’s Representative

Shared Effect: Ensuring Confidentiality through Representatives

• Clause 4.3 requires the Contractor to appoint a representative responsible for all communications.
• Clause 1.12 binds the Contractor’s Representative to confidentiality obligations.

Elaboration:

• The Representative handles sensitive information and must protect it as per Clause 1.12.
• This ensures confidential data is safeguarded during daily operations.

Sequence of Interaction:

1. Appointment: Contractor appoints a Representative under Clause 4.3.
2. Communication: Representative exchanges information with the Employer and Engineer.
3. Confidentiality Obligations: Representative must comply with Clause 1.12.

5. Interaction with Clause 5.2: Contractor’s Documents

Shared Effect: Protection of Design and Technical Information

• Clause 5.2 outlines the Contractor’s responsibility to prepare and submit documents.
• Clause 1.12 requires that any confidential information within these documents is protected.

Elaboration:

• When submitting documents for review, the Contractor may include confidential technical details.
• The Employer and Engineer must handle these documents as per the confidentiality obligations.

Sequence of Interaction:

1. Document Submission: Contractor submits documents under Clause 5.2.
2. Marking as Confidential: Confidential sections are marked accordingly.
3. Review and Handling: Employer and Engineer handle documents per Clause 1.12.

6. Interaction with Clause 8.4: Advance Warning

Shared Effect: Confidentiality in Project Planning

• Clause 8.4 requires the Contractor to give advance warning of potential issues.
• Clause 1.12 ensures that any disclosed sensitive information during these warnings remains confidential.

Elaboration:

• The Contractor might reveal proprietary solutions or sensitive project strategies.
• Confidentiality obligations protect this information from misuse.

Sequence of Interaction:

1. Advance Warning Issued: Contractor provides notice under Clause 8.4.
2. Disclosure of Sensitive Information: Details of potential issues and solutions are shared.
3. Protection of Information: Clause 1.12 ensures confidentiality is maintained.

7. Interaction with Clause 15.2: Termination for Contractor’s Default

Shared Effect: Adjusting Confidentiality Obligations upon Termination

• Clause 15.2 allows the Employer to terminate the Contract due to the Contractor’s default.
• Clause 1.12 permits the Employer to disclose confidential information as necessary when exercising rights under Clause 15.2.

Elaboration:

• To complete the Works, the Employer may need to share the Contractor’s confidential information with third parties.
• Clause 1.12 provides an exception, balancing confidentiality with practical needs post-termination.

Sequence of Interaction:

1. Termination Initiated: Employer terminates under Clause 15.2.
2. Disclosure to Third Parties: Employer shares necessary information to continue the Works.
3. Confidentiality Exception Applied: Clause 1.12 allows this disclosure.

8. Interaction with Clause 18.1: Exceptional Events

Shared Effect: Confidential Communication during Crises

• Clause 18.1 addresses events beyond control (e.g., natural disasters).
• Clause 1.12 ensures that any confidential information shared about such events is protected.

Elaboration:

• Parties may exchange sensitive information regarding impacts and responses.
• Maintaining confidentiality is crucial to prevent panic or competitive disadvantage.

Sequence of Interaction:

1. Event Occurs: An exceptional event affects the project.
2. Information Exchange: Confidential details about impacts are shared.
3. Confidentiality Upheld: Clause 1.12 obligations remain in effect.

9. Interaction with Clause 20.2: Claims for Payment and/or EOT

Shared Effect: Protecting Confidential Information in Claims

• Clause 20.2 sets out procedures for claims.
• Clause 1.12 ensures any confidential supporting information is protected during the claim process.

Elaboration:

• The Contractor may need to submit detailed records containing proprietary information.
• Both parties must maintain confidentiality of these documents.

Sequence of Interaction:

1. Claim Submitted: Contractor makes a claim under Clause 20.2.
2. Supporting Information Provided: Confidential records are included.
3. Confidentiality Maintained: Parties adhere to Clause 1.12.

10. Interaction with Clause 21.1: DAAB Appointment

Shared Effect: Confidentiality in Dispute Resolution

• Clause 21.1 involves the appointment of the Dispute Avoidance/Adjudication Board (DAAB).
• Clause 1.12 extends confidentiality obligations to the DAAB proceedings.

Elaboration:

• Disputes may require disclosure of confidential information.
• All parties, including DAAB members, must respect confidentiality.

Sequence of Interaction:

1. DAAB Appointed: Under Clause 21.1.
2. Dispute Proceedings: Confidential information is presented.
3. Confidentiality Obligations: Clause 1.12 ensures information is protected.

Detailing the Sequence(s) of Interactions Related to Clause 1.12

Overall Sequence:

1. Contract Formation: Parties agree to the Contract terms, including confidentiality obligations under Clause 1.12.
2. Execution Phase:
   • Information Exchange: Ongoing sharing of documents and data.
   • Marking Confidentiality: Sensitive information is marked “confidential” by the disclosing party.
3. Contractual Operations:
   • Use of Documents: Under Clause 1.10 and 1.11, parties use each other’s documents as permitted.
   • Confidentiality Maintained: Clause 1.12 ensures information is protected during use.
4. Communication and Instructions:
   • Engineer’s Role: Engineer requests information per Clause 3.7.
   • Contractor’s Representative: Communicates per Clause 4.3, adhering to confidentiality.
5. Issue Resolution:
   • Claims and Disputes: Handled under Clause 20.2 and Clause 21.1, with confidentiality obligations in place.
   • Exceptional Events: Addressed under Clause 18.1, maintaining confidentiality.
6. Termination:
   • Termination Invoked: Under Clause 15.2, confidentiality obligations adjust to permit necessary disclosures.
7. Post-Contract Phase:
   • Continuation of Obligations: Confidentiality under Clause 1.12 persists beyond the Contract’s completion or termination, unless exceptions apply.

Varied Phrasings to Elaborate Shared Effects

• Reciprocity in Confidentiality: Clauses 1.10 and 1.11 create a two-way street where both parties are custodians of each other’s sensitive information, with Clause 1.12 providing the traffic rules for handling it.
• Conduit of Trust in Dispute Resolution: Clause 1.12 acts as a protective cloak during the vulnerability of disputes under Clauses 3.7, 20.2, and 21.1, ensuring that confidential disclosures don’t become liabilities.
• Navigating Termination with Integrity: The interplay between Clause 15.2 and Clause 1.12 allows the Employer to take necessary actions post-termination without breaching confidentiality, balancing fairness and practical necessity.
• Ensuring Seamless Communication: Through Clause 4.3, the Contractor’s Representative becomes the vessel of confidential communications, bound by the obligations of Clause 1.12 to safeguard the integrity of shared information.
• Safeguarding Innovation and Proprietary Data: The synergy between Clause 5.2 and Clause 1.12 protects the Contractor’s intellectual contributions, ensuring that technical secrets remain secure even while fulfilling contractual obligations.

Clause 1.12: Confidentiality in the FIDIC Yellow Book 2017 plays a vital role in defining the obligations of the Contractor, Employer, and Engineer regarding the handling of confidential information. While the clause sets out the fundamental duties related to confidentiality, there are potential areas of ambiguity and differing interpretations that may lead to misunderstandings or disputes. Below, we’ll highlight these areas, offer practical recommendations for improved clarity, and propose a Particular Condition in alignment with the FIDIC Golden Principles. Additionally, we will provide real-life examples and insights from legal, technical, and construction perspectives.

Areas of Potential Ambiguity or Differing Interpretations

1. Scope of Confidential Information
   • Ambiguity: The clause refers to “all documents forming the Contract” being treated as confidential by the Contractor, but it doesn’t explicitly define what constitutes “confidential information” beyond documents marked as “confidential” by the Contractor when provided to the Employer and Engineer.
   • Perspective: There may be uncertainty about whether verbal communications, electronic correspondence, or unmarked documents are considered confidential.
2. Obligations of the Employer and Engineer
   • Ambiguity: The Employer and Engineer are required to treat “information provided by the Contractor and marked ‘confidential'” as confidential. This raises questions about the status of information not explicitly marked as confidential.
   • Perspective: The Employer and Engineer might assume that unmarked information is not subject to confidentiality obligations, leading to potential unauthorized disclosures.
3. Contractor’s Disclosure to the Engineer
   • Ambiguity: The Contractor is required to disclose “all such confidential and other information as the Engineer may reasonably require.” The term “reasonably require” is subjective and may lead to disagreements over the extent of information to be provided.
   • Perspective: The Contractor may be concerned about disclosing proprietary or sensitive information that is not directly related to verifying compliance with the Contract.
4. Restrictions on Publication
   • Ambiguity: The clause prohibits the Contractor from publishing or disclosing any particulars of the Contract without the Employer’s prior consent, but it does not specify the criteria for such consent or any timelines for obtaining it.
   • Perspective: This may hinder the Contractor’s ability to showcase their work or achievements for marketing or professional purposes.
5. Exceptions to Confidentiality Obligations
   • Ambiguity: The clause lists exceptions where confidentiality obligations do not apply, such as information already in a party’s possession without an obligation of confidentiality. However, it does not clarify how this applies to information developed jointly or shared during the Contract’s execution.
   • Perspective: Disputes may arise over whether certain information falls under the exceptions, especially when the source or prior possession is contested.
6. Duration of Confidentiality Obligations
   • Ambiguity: The clause does not specify the duration of the confidentiality obligations after the completion or termination of the Contract.
   • Perspective: Parties may be uncertain whether confidentiality obligations survive the Contract and for how long.

Practical Recommendations for Improved Clarity

1. Define “Confidential Information” Explicitly
   • Recommendation: Include a clear definition of “Confidential Information” in the Contract, encompassing all types of information that require protection, not limited to documents marked as “confidential.”
   • Example:“Confidential Information means all information, whether written, electronic, or oral, disclosed by one Party to the other, directly or indirectly, that is designated as confidential or that ought reasonably to be understood as confidential due to its nature or the circumstances surrounding its disclosure.”
2. Clarify Obligations for Unmarked Information
   • Recommendation: Specify that certain categories of information are deemed confidential even if not marked, and establish procedures for marking and handling confidential information.
   • Example:“Both Parties shall treat all technical, financial, and commercial information related to the Contract as confidential, whether or not it is marked as such. The absence of a ‘confidential’ marking shall not negate the information’s confidential nature.”
3. Define “Reasonably Require” for Disclosure
   • Recommendation: Establish criteria or guidelines for what information the Engineer may “reasonably require,” and allow the Contractor to limit disclosure of proprietary or sensitive information not directly relevant to Contract compliance.
   • Example:“The Engineer may request information from the Contractor necessary to verify compliance with the Contract. Such requests shall be specific, in writing, and limited to information directly related to the Contractor’s obligations under the Contract. The Contractor may withhold proprietary or sensitive information not essential for compliance verification, subject to mutual agreement.”
4. Specify Procedures for Consent to Publication
   • Recommendation: Outline the process for obtaining the Employer’s consent to publish Contract particulars, including response timelines and criteria for approval.
   • Example:“The Contractor shall request the Employer’s consent in writing at least 30 days prior to any intended publication. The Employer shall respond within 15 days of receipt of the request. Consent shall not be unreasonably withheld or delayed, and the Employer shall provide reasons for any refusal.”
5. Clarify Exceptions to Confidentiality
   • Recommendation: Provide detailed explanations or examples of the exceptions to confidentiality obligations, and outline procedures for handling disputes over such exceptions.
   • Example:“If a Party believes certain information falls under the exceptions specified in this Clause, it shall notify the other Party in writing, providing evidence of prior possession, public availability, or lawful third-party acquisition.”
6. Define Duration of Confidentiality Obligations
   • Recommendation: Specify the period during which confidentiality obligations remain in effect after the Contract’s completion or termination.
   • Example:“The obligations of confidentiality under this Clause shall survive the expiration or termination of the Contract for a period of five (5) years, unless otherwise agreed in writing by the Parties.”

Proposed Particular Condition

In accordance with the FIDIC Golden Principles, which emphasize clarity, fairness, and balanced risk allocation, the following Particular Condition is proposed to address the identified ambiguities:

Particular Condition – Amendment to Clause 1.12 [Confidentiality]

1. Definition of Confidential Information
   • “Confidential Information” means all information, in any form, disclosed by one Party to the other, including but not limited to technical data, financial information, trade secrets, know-how, methodologies, designs, drawings, specifications, and any other information that is either designated as confidential or that a reasonable person would understand to be confidential due to its nature or the circumstances of disclosure.
2. Obligations of the Parties
   • Both Parties shall treat all Confidential Information related to the Contract as confidential and shall not disclose it to any third party without the prior written consent of the other Party, except as necessary to perform their obligations under the Contract or as required by law or regulatory authorities.
3. Engineer’s Access to Information
   • The Contractor shall provide the Engineer with information reasonably required to verify compliance with the Contract. Requests for information shall be made in writing, specifying the details required. The Contractor may withhold proprietary or sensitive information not directly relevant to Contract compliance but shall provide sufficient information to satisfy the Engineer’s request.
4. Consent for Publication
   • The Contractor shall seek the Employer’s prior written consent before publishing or disclosing any particulars of the Contract. The Employer shall respond to such requests within fifteen (15) days and shall not unreasonably withhold or delay consent. If consent is denied, the Employer shall provide reasons in writing.
5. Exceptions to Confidentiality
   • The obligations under this Clause shall not apply to information that:(a) was already in the possession of the receiving Party without an obligation of confidentiality prior to disclosure;(b) is or becomes publicly available through no breach of this Contract;(c) is lawfully obtained from a third party not bound by confidentiality obligations; or(d) is independently developed by the receiving Party without reference to the Confidential Information.
6. Duration of Obligations
   • The confidentiality obligations set forth in this Clause shall survive the termination or expiration of the Contract and shall remain in effect for a period of five (5) years thereafter, unless otherwise agreed in writing by the Parties.
7. Obligations upon Termination
   • Upon termination or completion of the Contract, each Party shall return or securely destroy all Confidential Information received from the other Party, except for one archival copy kept in accordance with legal and regulatory requirements.

Real-Life Examples and Perspectives

Legal Perspective

• Example: In a construction project, the Contractor disclosed proprietary construction techniques to the Engineer to demonstrate compliance. The Engineer shared this information with a third-party consultant without proper authorization, leading to the Contractor’s trade secrets being exposed. This resulted in legal action for breach of confidentiality.
• Consideration: Clearly defining confidentiality obligations and procedures for handling confidential information can prevent unauthorized disclosures and protect proprietary rights.

Technical Perspective

• Example: The Contractor developed innovative software for project management. Without explicit confidentiality provisions, the Employer assumed ownership and distributed the software to other contractors. This led to disputes over intellectual property rights.
• Consideration: Specifying the ownership and confidentiality of technical tools and software ensures that proprietary technology is protected.

Construction Perspective

• Example: The Contractor wanted to publish a case study showcasing the project’s achievements but faced delays in obtaining the Employer’s consent due to unclear procedures. This affected the Contractor’s marketing efforts and professional recognition.
• Consideration: Establishing clear timelines and criteria for obtaining consent to publish can facilitate collaboration and mutual benefit.

Conclusion

By addressing the potential ambiguities in Clause 1.12 through explicit definitions, clarified obligations, and detailed procedures, both the Contractor and the Employer can better understand their rights and responsibilities regarding confidentiality. The proposed Particular Condition enhances clarity and aligns with the FIDIC Golden Principles by:

• Promoting Clarity: Providing precise definitions and procedures to reduce misunderstandings.
• Ensuring Fairness: Balancing the need for confidentiality with the practical requirements of project execution and verification.
• Facilitating Balanced Risk Allocation: Outlining obligations and exceptions in a way that protects both parties’ interests.

Implementing these recommendations can foster trust, protect sensitive information, and minimize the risk of disputes, contributing to the successful completion of the project.

Note: It is advisable for both parties to review these provisions with legal counsel to ensure compliance with applicable laws and regulations, and to tailor the confidentiality provisions to the specific needs of the project.