NEED-TO-KNOW

EFFECTIVE TIME OF THE NON-DISCLOSURE AGREEMENT

The Non-disclosure agreement (NDA) is usually not the main contract, but it’s effective time may not coincide with the main contract, unlike other accompanying agreements. Basically, the NDA effective time is the period during which the Recipient is obliged to keep confidential information confidential as desired by the Provider.

How should this effective time be prescribed?

• Benefit to the Provider: This effect should be “indefinite”, meaning that even if the Master Contract terminates and/or the transaction ends, the Recipient must keep confidential information confidential.

Example: This Non-disclosure agreement is effective from the time the Recipient first acquires the Confidential Information, continuously and forever (including if the Master Contract and/or Transaction is terminated, cancelled or invalidated).

• Benefit to the Recipient: This effect should be “narrow”, meaning that when the Main Contract is terminated, the Recipient is no longer required to keep confidential information confidential.

Example: This Non-disclosure agreement is effective from the time it is entered into by the Parties, continues continuously and terminates at the same time as the Master Contract.

• Cân bằng cho Các Bên: This effect should be “deterministic”, i.e. after a certain period of time (at which time the disclosed confidential information is not harmful to the Provider) the NDA ceases and the Recipient is no longer required to keep the confidential information confidential.

Example: This Confidentiality Agreement is effective from the time the Recipient first acquires the Confidential Information, is continuous and terminates [36 months] from the time of termination of the Master Contract.

(Where there is special confidential information that needs to be protected forever, an “exception rule” should be added.)

Note: In fact, many NDAs stipulate “… the obligation to keep confidentiality of Confidential Information in effect after the termination of this NDA”, which may affect the enforceability, as the question arises: Does the NDA terminate, does the Recipient’s liability provision for breach of confidentiality obligation remain valid?

NEED-TO-KNOW

VALIDITY OF DIGITAL SIGNATURE

1. What is a digital signature? A digital signature (DS) is a form of electronic signature of an individual or organization. DS can be provided by an official unit (providing DS certification services in accordance with Vietnamese law, such as VNPT, Viettel, FIS CORP,…) or unofficially (not licensed by the Government of Vietnam).

2. Does DS invalidate a civil transaction?

Transactions signed with DS have the same legal validity as directly signed[i], when DS meets the security conditions prescribed by law (validity, secret key, public key, control of the signer’s secret key,…). In other words, signing with a legally satisfactory DS will not render the transaction invalid.

Note, according to Vietnamese law[ii], Transactions are considered invalid when the subject establishing the transaction laDS capacity (passive legal, active legal). Simply, we need to verify that the DS really belongs to the partner’s representative and is it legal?

We think that the use of DS provided by an official unit would be advantageous in this verification, as well as when requesting the deed as evidence if a dispute arises in this regard (using unofficial DS, even provided by a world-renowned unit,  but it will be difficult to prove this).

3. Does the Company’s individual DS have a legal risk for transactions?

If the transaction is signed using the Company’s legitimate DS, then it is essentially valid, the likelihood of invalidity will be very low.

If the transaction is signed with a personal DS (whether a individual of the Company, a legal representative, even with the Company’s seal), then it can still be disputed as to the validity of the transaction resulting in the transaction being invalid. Because then, the conclusion will depend on the evidence proving the legitimacy of DS as mentioned above.

^[i] Article 8 and 9 of Decree No. 130/2018/ND-CP

^[ii] Articles 122 and 117 of the Civil Code No. 91/2015/QH13