Corporate Law Mutual NDA & Subcontract Agreements

[ljse]

A business relationship is being established to meet the needs of a customer's service needs as a Prime and Subcontractor relationship. A Mutual Non-Compete and Non Disclosure (MNCND) has been already agreed upon and executed to be governed in a particular (specified) State. As the business / contract relationship furthers along, a Subcontract Agreement is now required for continuance of this relationship. The negotiations on the Subcontract Agreement is now under conflict, since the governing State is looking to be changed differently from the MNCND. The questions I have are as follows:

1) Is it wise to reference/incorporate in the Subcontract Agreement the MNCND (executed date included) in the Subcontract Agreement for adherence? If not, what are implications?

2) The request is to have a new MNCND re-signed and dated, but information has already been disclosed from the date of the original MNCND? Is it wise to implement a new one to accomodate the new governing State? How will this impact information that has already been disclosed?

3) If we kept the original MNCND and implemented the new State governing laws in the Subcontract Agreement will this void the MNCND if we agree to the new governing State in the Subcontract Agreement? For consistency, is it legally required to implement the original governing State (from the MNCND) in the Subcontract Agreement in order to not void the MNCND?

 

[Michael Wechsler]

It isn't a problem to have a superseding agreement but you had better appreciate the language and repercussions of that latter document. You should probably look to see how the new document handles disputes related to something that occurred prior to that new document. Second, you should be aware of the laws of the new state versus the old. Non-competes especially are different from state to state, including their enforceability (I remember this once came up to me with regard to an employment agreement.)