A recurring commercial question is whether simply marking a document “Confidential” creates a legally binding obligation on the recipient where no Non-Disclosure Agreement (NDA) has been executed.
A Federal High Court sitting in Lagos, Nigeria, in Walls & Gates Ltd v. MTN Nigeria Communications Plc1 addressed this issue and reinforced a fundamental principle of contract law: parties are bound by the agreements they execute. The court held that merely marking a document “Confidential” does not, without more, create a contractual obligation of confidentiality.
The Facts in Context
In that case, the plaintiff sent an unsolicited proposal via email to the defendant and marked it “Confidential.” Similar proposals were also sent to other companies for collaboration and to the Copyright Commission for registration. The defendant did not respond to the email nor have any discussion with the plaintiff but later used a phrase allegedly similar to one contained in the proposal. The phrase in issue was “20 for 20 millennium promotion 20 cars to be won” as contained in the document. The defendant, however, used the phrase “MTN 20th anniversary”. The two phrases are different. As argued by the defendant, neither phrase shows sufficient originality, and there is nothing confidential about a naturally occurring event such as a corporate anniversary.
The court declined to impose a confidentiality obligation solely because the document was labeled “Confidential.” There was no executed NDA or other agreement creating binding obligations between the parties. The court stated thus:
“On the issue of confidentiality, it seems a bit odd to suggest that because a document is marked ‘confidential’ then it is subject to the rules as to confidentiality. In this instant even before exhibit C was written to the defendant, the plaintiff had forwarded same to the copyright commission for registration. That, to my mind, is sufficient to resolve whatever semblance of confidentiality existed in the said exhibit C. It had also been used in support of an application for trademark registration. That makes it public and within the knowledge of the public and thus no longer confidential. Also, after delivering the said exhibit to the defendant, the plaintiff also forwarded same to other organisations. There was also no confidential relationship between the plaintiffs and the defendants. What is more, the parties did not enter into a non-disclosure agreement. Therefore, there was no situation of confidentiality.”
Why Marking “Confidential” Is Not Enough
Under Nigerian law, contractual obligations arise from agreement, not from unilateral labeling. As the Supreme Court affirmed in Owoniboys Technical Services Ltd v. UBN Ltd.2 parties are bound by the terms of their contract.
A person who merely reads a document marked “Confidential” does not automatically assume legal obligations unless:
- there is a prior agreement,
- there is conduct evidencing acceptance of terms, or
- the circumstances clearly impose an equitable duty of confidence.
In commercial practice, many companies exchange proposals before formalizing discussions. However, without an NDA, legal protection may be limited, particularly where the proposal is unsolicited.
Comparative Position: UK, and South Africa
The position in Nigeria aligns broadly with other common law jurisdictions, but with important nuances.
In the UK, marking a document “Confidential” is not decisive but may serve as evidence that confidentiality was intended. In Coco v A.N. Clark (Engineers) Ltd.3 the English High Court established that confidentiality may arise even without a contract if:
- the information has the necessary quality of confidence;
- it was disclosed in circumstances importing an obligation of confidence; and
- there was unauthorized use causing detriment.
Similarly, in Saltman Engineering Co Ltd v Campbell Engineering Co Ltd,4 the court recognized that breach of confidence can exist independently of contract.
Like the UK, South Africa recognizes equitable protection independent of contract. In Waste Products Utilisation (Pty) Ltd v Wilkes5, the court held that confidential information can be protected even without a written agreement under the common law, provided the circumstance or relationship creates a duty of confidence such as employer-employee relationship.
The Practical Position in Nigeria
While several jurisdictions may recognize equitable principles derived from English common law, proving a duty of confidence without an NDA is often difficult in practice. Where a proposal is unsolicited and circulated widely, it becomes even harder to establish confidentiality.
Additionally, copyright law protects the expression of ideas, not the underlying business concept. Registering a proposal does not automatically protect its commercial ideas.
Practical Guidance for Businesses
Although marking a document “Confidential” may be a good practice, however, it should not be relied upon as the sole protective mechanism. Before sharing business proposal, proprietary processes, strategic concepts, or technical data, parties should execute a properly drafted NDA.
An introductory meeting may precede formal documentation. However, once discussions move beyond general information and into sensitive disclosures, an NDA should be signed.
Conclusion
Marking a document “Confidential” signals intention. It does not, by itself, create a binding legal obligation. In Nigeria, as in the UK and South Africa, stronger protection arises where there is a signed NDA, or the circumstances clearly establish an obligation of confidence. For businesses, the safest course is simple: treat confidentiality as a legal structure, not a label.
Author: Stella Igidi
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