To view a July 8, 2019 update to this post, click this link.

There is an unresolved issue in Texas law that is important to those using non-disclosure agreements (a/k/a confidentiality agreements) to protect trade secrets.  For brevity, we’ll call these contracts “NDAs.”

The tension exists between these two items: (i) for NDAs covering trade secrets, the disclosing party often desires to place a perpetual obligation on the recipient to maintain the trade secret in confidence – thereby avoiding the risk of waiving trade secret protection upon expiration of the NDA and (ii) case law holding that parties to a contract with a term of indefinite length may terminate the contract at will.  I am unaware of a single court decision answering the question of whether a perpetual NDA governed by Texas law is terminable at will. Continue reading