Journal of Legal Research

Journal of Legal Research

The Enforceability of Non-Disclosure Agreements Concerning Business Information Not Qualifying as Trade Secrets: Lessons from U.S. Law for Iran

Document Type : Original Article

Author
M.A. Student in International Trade and Investment Law, Faculty of Law, Shahid Beheshti University, Tehran, Iran.
Abstract
Non-disclosure agreements (NDAs) often protect information beyond legally recognized trade secrets, raising the question whether business information that does not meet trade secret requirements may nevertheless be subject to an enforceable contractual duty of confidentiality. Using a descriptive-analytical method and comparative approach, this article examines the issue under U.S. and Iranian law. U.S. courts follow no uniform rule. Some enforce confidentiality obligations primarily according to the agreement’s terms; others restrict protection to information qualifying as trade secrets; and a third approach recognizes contractual protection for confidential business information below the trade secret threshold while reviewing the reasonableness of the obligation’s scope and effects. The latter approach is more balanced because it protects legitimate business interests in non-public information while preventing NDAs from restricting public information, general knowledge and professional skills, employee mobility, or competition. Under Iranian law, freedom of contract, the binding force of contracts, and the presumption of validity support the view that the absence of trade secret status does not by itself invalidate a confidentiality obligation. However, merely labeling information “confidential” should not justify unlimited enforcement. Accordingly, contractual protection of confidential business information lacking trade secret status should generally be recognized, while courts should retain authority, in exceptional cases and on public policy grounds, to limit unreasonable contractual restraints.
Keywords


Articles in Press, Accepted Manuscript
Available Online from 02 September 2026