Monday, January 19, 2009

“Of the Necessity of Confidentiality Agreements”

I am moved to consider lately the necessity of confidentiality agreements in the business world. A scrupulous businessperson should always carefully consider every aspect of a deal he is preparing to negotiate. A deal, as it is known to be called, is in fact a meeting of two or more minds, in which the deal's value to all minds at risk in the deal is agreed to be 100 percent of the transaction leaving no wasteful sum of risk to self or cost to manage risk as remainder. Once a meeting of the minds has been established and the terms of the deal are clear to all parties, the two most important aspects of a deal, after value, are the risk and the cost to manage such risk. The consideration of these two additional factors does itself contain and wield the greatest value of all, for in this consideration clause lay the covenant of absolute truth and the understanding of this establishment derives only from the greatest risk and the greatest cost.

There is a price tag for doing business as well as there is a cost tag in business. The price of business is subject to supply and demand of materials and services in the immediate moment. The cost of business is also a supply and demand subject but spread out over the lifetime of the business relationship and takes into consideration more of the subjective qualities of a business transaction, like the nature of the parties involved. Holding confidential information in the check of confidence can be a great risk factor that adds weight to the overall cost tag of the business transaction. Only well vetted business prospects will have limited risk factors that limit cost factors. This vetting prospect could sometimes add a short-term time cost to the deal in exchange for a long-term limit on risk.

Fast course business, as is regularly practiced in our contemporary American society, does not show due consideration to itself nor to the idea that absolute truth, the kind that limits risk and associated costs, can be attained in the course of a meeting of minds. That is how the use of confidentiality agreements came to be in the first place---Businessperson A warrants to Business person B that the information transacted in a deal will remain confidential between the business parties at hand and held in confidence by no other. The words of this truth will have no meaning if either party has not yet been known to be absolutely truthful. To do business with a person or entity that is assumed to be untrustworthy has become a way of life, a demand supplied by written instruments. Certain contracts are, of course necessary, as written instruments can contain all the memory of a deal, whereby memory tends to fade or scatter. This essay does not challenge the value of written instruments in general, but only specifically challenges that special part of a deal when eyes are meant to look into eyes and hands are meant to lock and form the bond of confidence, the covenant of truth, that is to be the bedrock upon which the entire deal, remembered by written instruments, is laid and erected as a monument of the meeting of minds.

A businessperson who relies upon a confidentiality agreement to secure the value of his assets and limit his liability during and after a transaction is, in fact, no businessperson at all. For the premeditated act of creating a written instrument of insurability against the trustworthiness of another is itself an explicit contract that warrants the self to do business knowingly with another self without first establishing the value of one self in the mind another self and vice verse. This wasteful practice thereby infinitely adds unnecessary risk and cost to manage such risk to the deal that need not be added. Additionally, the value of such risk and cost are both then deducted from the overall value of the business deal itself, often times leaving behind, as net, a worthless venture when compared to a perfect deal. The perfect deal is one in which all parties are entirely agreed of the value of all minds entering the contract, the risk is neutralized by trust, the cost of doing business is neutralized or limited by the zero risk factor.

To take this a step further, no confidentially agreement can ever be truly valid in a court of law, if the court of law first and foremost values the sanity of a mind. Or more generally speaking, the court of law that values the ability of the mind to create a written instrument and do business with another able mind considers only sound and valid thinking from the bodies and minds that are subject to its opinions. The soundness and validity of a contract are rooted in the sanity of the minds which created and entered it. And what sane mind would knowingly covenant with itself to do business of any value with another mind who is assumed to be untrustworthy of knowing value in the thing it sees? This enabling of one sound or unsound mind to do business with another mind that is, by worst case scenario thinking, presumed to be untrustworthy, is the essence of a confidentiality agreement; to protect one mind from the worst case scenario assumed in a deal, that the other mind is insane, or unwilling to honor the sanity of the original meeting of the minds during or after the written instruments have been executed.

I posit the following statements as a reasonably true:
  • that no mind able to think can knowingly covenant with itself to make a confidential agreement with another mind it deems unworthy or unable to value itself, first, and its business prospects, second;
  • that the act of doing business with such a mind thereby increases the risk to self and the cost to self to manage such risk to an absurd level;
  • and whereby proceeding to perform such an agreement is actually a premeditated act, such premeditation constitutes a fundamental flaw of logic and inability to reason a solution for the problem that procures such flaw;
  • and, furthermore, that this fact then necessarily disqualifies such a mind by breach of insanity from such a written instrument containing such covenants with self and other in this particular sort of agreement that is intended to arrange a confidential meeting of the minds named therein such a written instrument.
In short the question that stands is “Why would reason allow one mind to enter an agreement that by due diligence of logic need not be entered unless it be that the one mind is unreasonable to begin with?”

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