Table of Contents
Last updated July 21, 2022
When someone asks for something to be kept “off the record,” they expect the other person to keep their sensitive information private.
But, even if the speakers agree their conversation will be off the record, certain elements of a valid contract must be in place for the verbal agreement to be legally binding.
Plus, there’s still the possibility that one person won’t hold up their end of the bargain.
So, how can you enforce someone’s promise to stay quiet?
Let’s compare two different options for protecting sensitive information: a verbal “off the record” agreement and a written Non-Disclosure Agreement.
What does “off the record” mean?
You may have heard journalists using this phrase during interviews. Or, perhaps you had a private meeting with your employer and discussed trade secrets.
The term “off the record” doesn’t have a universally accepted definition; however, it’s generally understood that this term refers to a confidential conversation.
The phrase became commonplace in the 1930s when interview sources for news articles would be willing to talk but didn’t want journalists to quote them.
For a conversation to qualify as being off the record, speakers must agree to keep the conversation confidential. If one party is not clear on this, or never intended to enter a confidential conversation, then free consent was not given (an important element of a legal agreement). In this case, the decision to keep the conversation off the record may not be legally binding.
If you find yourself in a conversation that involves sensitive subject matter, remember that someone could share the conversation unless both parties expressly agree otherwise. What’s more, a verbal agreement alone can’t guarantee complete confidentiality.
Are “off the record” conversations legally binding?
Unfortunately, an “off the record” agreement often doesn’t qualify as a legally binding contract because it lacks one or more of the elements that make up a valid contract.
There are five main elements of a valid agreement or contract:
- Offer and acceptance: One party offers something of value (in this case, sensitive information) and the other party accepts it.
- Consideration: All of the parties in the agreement must benefit from some type of consideration (which is basically anything of value). For example, the party disclosing information gains peace of mind knowing the details will be kept private, while the party agreeing to stay silent gains access to the information.
- Mutuality: The parties both consent to the agreement without undue influence, coercion, duress, or misrepresentation of facts. This is also called intention, free consent, or a “meeting of the minds.”
- Legal Purpose: The subject matter of the agreement must be lawful. A contract with an illegal purpose or that involves either of the parties committing a crime will be immediately void.
- Certainty of Terms: The contract terms must be reasonably specific so that there is an agreement between the parties. Uncertainty over essential terms will cause the entire contract to fail.
A verbal agreement is legally binding when all of these elements are present.
What happens when someone breaks a verbal agreement?
If someone fails to meet their obligations under a contract, you can sue them for breach of contract. However, without a written document as evidence, you’ll have difficulty establishing the terms of a contract.
Although it’s not a crime to break a contract, a party may seek legal remedies (such as damages, recission, or specific performance) for any harm caused by the breach.
If the dispute goes to court, a judge will need details of the contract and proof that both parties truly agreed to them. But, in this case, it’s the word of one party against the word of another.
However, not all cases are brought to the courts. For example, a journalist who includes information that was supposed to be “off the record” might not be sued. Still, they could lose their professional credibility and the trust of their sources.
For this reason, an “off the record” conversation is more culturally binding than legally binding. While it’d likely be hard to enforce a contractual obligation, there is a professional reputation at stake.
Ideally, it’s best to have a written agreement in situations where sensitive information must be protected.
A Non-Disclosure Agreement (NDA), sometimes called a Confidentiality Agreement, is a document that protects information, ideas, trade secrets, and more from being shared by imposing contractual obligations.
People often use these documents in business relationships that include discussions about confidential information (e.g., when an entrepreneur pitches an invention or product idea to a potential investor).
There are also many examples of high-profile people using NDAs being used to protect their reputations. Yet, even NDAs have their limitations. For instance, a broad or vaguely written contract may be difficult to enforce.
An NDA can’t physically prevent someone from sharing confidential information. However, a well-written NDA is a strong deterrent for anyone who signs one because of the consequences it outlines for leaking the info.
For instance, a clause in the NDA might say the wronged party is entitled to an injunction (court order) in the event of an information breach. In this case, the accused party would be prohibited from spreading the information until a hearing is set. Penalties for breach of a court order include fines, imprisonment, or both.
Another limitation is the difficulty of determining the monetary value of the damages caused by a leak. Some damages are beyond repair—no matter how much money is paid out.
Regardless, a written NDA can be more effective in protecting sensitive information than a verbal agreement. It provides evidence of the terms of the contract and clearly identifies available remedies if the contract is broken.
Protecting sensitive information
There are many instances in which people and businesses benefit from keeping information confidential. Whether it’s a journalist protecting a source or a business protecting its operations, verbal “off the record” agreements and written NDAs are meant to ensure the security of all the parties involved.
It makes sense for people to use these agreements more frequently in a time of vast access to information and privacy concerns around every corner.
Still, it’s important to understand the legal workings and limitations of these agreements to protect your information properly.
Without a written agreement, it’s much harder to establish that a contract was ever in place. Also, it’s important to remember that certain elements of a legal contract may easily be missing from a verbal agreement. An NDA is more responsible because it provides certainty, clarity, and consequences in a written contract.