Contracts that do not lead to war - the Polish NDA template

This newsletter talks about an innovative model of NDA in Polish, but within the next few months there will be an English version - stay tuned!

The mantra of many contract professionals is that 'contracts are written for the time of war'.

It is therefore not surprising that contract drafting and negotiation are focused on what happens if something goes wrong (what the parties' liability will be then, what compensation, when the contract can be terminated, etc.), rather than on ensuring that everything goes right.

Black scenarios rulez

This is not just a Polish characteristic. Since 2007, World Commerce & Contracting has been conducting a study of the most commonly negotiated contract clauses. The ranking of these clauses has not changed for years - they are mainly clauses that regulate the worst-case scenarios for the parties.

Here is part of the 2022 ranking.

Interestingly, at the same time, this study shows that, from the perspective of completed contracts, these are not at all the most important provisions - i.e. the ones that led to successful completion of contracts. You can read more about this in my September 2020 article "Most frequently negotiated v. most important contractual provisions" (in Polish) or a publication in English here: Most Negotiated vs. Most Important Contract Terms ( vestedway.com ) .

So, although a contract is first and foremost a commercial transaction that seeks to realise the interests of both parties - to provide a solution to one party's problem by providing a consideration by the other - in practice, these key issues are overlooked in the drafting and negotiation of contracts in favour of a focus on black scenarios. It is therefore not surprising that contract negotiations are often a source of frustration for the parties and a reason for unconscious resentment that then weighs on the commercial relationship.

Trouble with NDA

A perfect illustration of this problem is the negotiation of a typical NDA - non-disclosure agreement - which, in theory, should allow the parties to quickly begin open discussions about how to work together.

In practice, however, the NDA, which should simply ensure that all information exchanged between the parties is confidential, often becomes a problem, with the parties spending hours negotiating its provisions in detail.

Most NDAs on the market suffer from the same problems as other contracts - provisions written in language that is difficult to understand, overly elaborate definitions, high and unlimited contractual penalties, overly detailed descriptions of the parties' obligations that do not take into account the specifics of a particular situation.

Let's start from the beginning

The NDAs we use often contain provisions that have come up in the context of a particular situation and then stayed in the template. This is one of those contracts where we like to put in provisions just in case, repeat the same thing in different ways and avoid taking anything out.

Not surprisingly, most of these agreements are not friendly to read and block a number of transactions.

What about starting with a model NDA with only the necessary provisions? A model agreement that realistically protects the confidentiality of information shared by both parties, but does not favour either party and is easy to understand?

oneNDA

In LegalTech Polska Foundation, we first decided to prepare a translation of the oneNDA into Polish. Those who are not familiar with the history of oneNDA should definitely read the article "oneNDA in Polish" (as the title suggest - in Polish). However, this was not enough for us - we started to think about preparing another template of NDA - this time better adapted to the Polish specifics of concluding non-disclosure agreements.

Polish NDA

And this is how the model non-disclosure agreement Polish NDA was created. This is a proposal for a Polish standard non-disclosure agreement.

A model agreement in the format of your choice can be downloaded from the LegalTech Poland Foundation website at the above-mentioned link.

You may use the Polish NDA template in any way you wish. You may copy, modify and distribute the template in the original or with your changes.

I encourage the use of the template, its popularisation, and any comments on the template and ideas for its improvement.

An English version of this Polish NDA is planned for the next few months, as well as a bilingual Polish-English version. Send me a message if you would like to be notified when the work on this version of the Polish NDA is completed.

Polish NDA is the beginning of change

The trust of entrepreneurs and citizens in the law and in lawyers themselves is not impressive in Poland due to a number of factors. It is necessary to start discussing both the current legal culture in Poland and the modern model of legal services in support of business.

I believe that a reasonable standardisation of certain aspects related to business-to-business transactions, based on a community consensus, can serve the economy well and be an element of change for the better.

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