Unreasonable Contract Again
I wrote previously about unreasonable contracts, particularly about the click-through confidentiality agreement from EquityZen which requires that those agree to it promise not to reveal the existence or the contents of the agreement itself.
The last time I wrote about this was over 3 years ago, which means that my previous agreement has expired and I can again tell you about the existence of EquityZen's confidentiality agreement which is so private that anyone agreeing to do business with them must not (for 3 years) even acknowledge the existence of the agreement, yet so public that they publish it on their website.
As I said previously, this agreement has many sensible, reasonable clauses. For example, it requires that "The Recipient shall keep the Evaluation Material strictly confidential". This is a perfectly reasonable condition: they will share confidential information with potential investors and they require those investors to keep the information private. I am perfectly willing to abide by this restriction.
But it also contains this clause:
Except for such disclosure as is necessary not to be in violation of any applicable law, regulation, order or other similar requirement of any governmental, regulatory or supervisory authority, the Recipient shall not, and shall not permit any of its Representatives to, without the prior written consent of the Disclosing Party, disclose to any person the existence or contents of this Agreement.
I cannot think of any valid business reason why the contents of the confidentiality agreement should be kept secret. I CERTAINLY cannot think of any valid business reason why the EXISTENCE of the confidentiality agreement should be kept secret. If there were any plausible way that I could negotiate I would ask that this clause be modified, but realistically there is not.
I AM interested in doing business with EquityZen, and the previous time that I clicked through and agreed to their contract has expired, so I am writing this blog post again describing their contract and linking to a public copy of the agreement, maintained by an objective third party.
AFTER I have published this blog post I intend to click through the agreement and after doing so I will (as the contract requires) keep the existence and the contents of the Confidentiality Agreement secret as the contract requires -- at least for the three year term of the agreement. But I wanted again to make sure that I publicly acknowledged the existence (and contents) of the agreement before I sign while I am not bound to keep it secret.
Requiring users to agree to keep the contents and existence of a policy that they publish on their website is a dumb policy on the part of EquityZen and I believe they should alter their agreement to remove this clause. That being said, while I am bound by the agreement I DO intend to abide by it.