Are there implied confidentiality obligations where there are no formal confidentiality agreements entered into by the parties?
Confidentiality obligations are imposed by the Protection of Trade Secrets Law No. (5) of 2005. In addition, on the basis that each party to a contract has an obligation to perform their obligations in accordance with the requirements of good faith, confidentiality provisions may be implied where the disclosure by a party of information (which was received from another party) may harm the interests of that other party. Specific confidentiality provisions are also implied into certain types of contracts, for example, under the Labour Law in Qatar, an employee is required to keep his employer’s industrial and trade secrets confidential during and after termination of employment, in addition to any express contractual provisions.
Furthermore, the Penal Code in Qatar creates various criminal offences with respect to breaches of confidentiality which should be considered. These include but are not limited to the following:
1. It is an offence to publish news, photographs, or comments pertaining to the secrets of people’s private or family lives, if these are real and true.
2. It is an offence for any person, who by reason of his profession knows a secret, to disclose it other than as permitted by law, or to use it for his own, or another person’s advantage, where permission is not first obtained from the concerned person.
3. It is an offence for any individual to open a letter or telegram without the consent of the addressee, or to eavesdrop on a telephone conversation.
4. It is an offence to play a recording of a private conversation, where permission is not first obtained from the concerned person.
5. It is an offence to publish photographs of a person, where permission is not first obtained from the concerned person.
What are the consequences of breach?
In relation to the breach of a contract of confidentiality, the Civil Code in Qatar provides that if the parties have not agreed the amount of compensation that should be payable (payment of which will in any event be subject to restrictions contained in the Civil Code), then compensation may be ordered by the court. While it is permissible to provide for liquidated damages in the contract, the court retains the power to override them and reduce the compensation payable for breach of contract if the defaulting party can show that the damages agreed are grossly excessive or that it has partially satisfied its obligations. If amounts of compensation are not fixed by the contract, the court will assess them with reference to the loss suffered or the gain that has been foregone, provided this was the natural result of the breach and it is proven that at the time of entering into the contract, the loss suffered or gain which has been foregone is one which the defaulting party could normally have foreseen. However, if the defaulting party can prove that the breach was caused by a factor for which the defaulting party was not responsible, then the defaulting party will not be under an obligation to compensate the other party.
Notice may required to be given to a defaulting party, before the defaulting party comes under an obligation to pay compensation.
In relation to the offences under the Penal Code mentioned above, the penalties include terms of imprisonment and fines.
Are specific terms/formalities required for a binding confidentiality agreement?
No. The formalities required for a binding confidentiality agreement are usually no different from those required for any other type of contract.
The requirements for a binding contract in Qatar are similar to those in common law jurisdictions such as England. Article 64 of the Civil Code provides for three key components of a legal contract under Qatar law including offer, acceptance, and the contract having a lawful purpose. In addition there must be an intention (willingness) to create legal relations; (in certain circumstances) consideration; and certainty of the subject matter of the contract.
It is also important to note that whilst not an express requirement under Article 64 of the Civil Code, a contract must be performed in a manner consistent with the requirements of good faith (Article 172(1), Civil Code).