Return of information: Overview, definition, and example
What is return of information?
"Return of information" refers to a contractual requirement for a party to return, destroy, or otherwise dispose of confidential or proprietary information upon request or at the end of a contract. This clause is commonly used in non-disclosure agreements (NDAs), employment contracts, and business transactions to protect sensitive information after the agreement ends.
For example, when an employee leaves a company, they may be required to return all company documents, digital files, and confidential records in their possession. Similarly, in a merger or acquisition, a prospective buyer who reviews financial documents may need to return or destroy them if the deal does not proceed.
Why is return of information important?
Ensuring the proper return or disposal of confidential information helps protect businesses from data leaks, intellectual property theft, and unauthorized use of proprietary materials. Without a return of information clause, sensitive data could remain in the hands of former employees, contractors, or business partners, increasing security risks.
For businesses, this clause helps maintain data security, enforce confidentiality obligations, and prevent misuse of business-critical information after a contract ends. It also ensures compliance with data protection regulations, such as GDPR or industry-specific privacy laws.
Understanding return of information through an example
Imagine a technology company hires a consultant to work on a software development project. The contract includes a return of information clause requiring the consultant to delete all project-related files from their devices and return company-owned hardware upon project completion. This prevents the unauthorized use of proprietary code.
In another scenario, a potential investor reviews a startup’s financial records under a confidentiality agreement. If the investment does not proceed, the startup can invoke the return of information clause to require the investor to return or securely destroy all documents received during due diligence.
An example of a return of information clause
Here’s how a return of information clause might appear in a contract:
“Upon termination or expiration of this Agreement, or upon written request by the Disclosing Party, the Receiving Party shall return or securely destroy all Confidential Information, including but not limited to documents, electronic files, and materials containing proprietary data. The Receiving Party shall certify in writing that such return or destruction has been completed.”
Conclusion
A return of information clause ensures that sensitive business information is securely handled after a contract ends, protecting intellectual property and confidential data. It is a crucial safeguard in contracts involving proprietary information, business transactions, and employment relationships.
By including a return of information clause in agreements, businesses can enhance data security, prevent unauthorized use of sensitive information, and comply with confidentiality and privacy regulations.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.