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Confidentiality Agreements FAQ

What is a Confidentiality Agreement?

Sometimes referred to as “Non-Disclosure Agreements,” Confidentiality Agreements are contracts in which a consenting party agrees not to disclose information that is learned during the relationship between the two parties. Typically these types of agreements are used in a business setting in which businesses want to keep trade secrets as their own secrets and avoid “leaking” them away when an employee decides to move on.

The two parties in a Confidentiality Agreement are typically known as the “Discloser” and the “Recipient.” In the case of a new-hire Non-Disclosure Agreement, the employer would be the Discloser and the new employee would be the Recipient. However, Confidentiality Agreements can expand beyond the business world and refer to specific types of information divulged in just about any type of relationship between two parties.

Why do I need a Confidentiality Agreement?

You only need one if you think you need one, or if you have been summarily advised by a lawyer or trusted adviser to seek one. Because the purpose of a Confidentiality Agreements is to protect information that you consider valuable, it follows that you’ll likely only need to seek this type of arrangement when you have valuable information to protect. However, any information that you wish to keep private can be protected under the terms of a Confidentiality Agreement.

What happens if a Confidentiality Agreement is not used?

If a Confidentiality Agreement has not been used – say, for example, when your business hired an employee – then you will have little legal recourse to pursue when the Recipient then takes privileged information and spreads it around later for their own purposes. Because a Confidentiality Agreement was not present, it could be said that there was no tacit agreement between the two parties to protect the information in question.

Oral agreements can constitute verbal contracts and can be legally binding; however, because these are more difficult to prove, they often do not hold up in court as well as a written agreement will. A written Confidentiality Agreement does not only specify which information is to be protected, but acts as proof that the agreement was made in the first place. This is perhaps the most valuable element to a contract between two parties.

What kinds of provisions does a Confidentiality Agreement contain?

The terms of the Confidentiality Agreement all boil down to the terms of the agreement itself, which is outlined in the following provisions:

Information to Recipient: A description of the information that will be disclosed and summarily protected. Without specifying which type of information is protected by the agreement, it can be much harder to protect it.
Right, Title, and Interest: This typically outlines the rights and duties that people have in relation to the information to be disclosed; it will often explain why the information is being disclosed.
Obligation to Protect Information: This provision adds that it’s not only important to keep silent about said information, but important to actively protect it when it is reasonable to do so.
Information Not Covered by Agreement: This explains which information is not expected to be kept confidential, which is important from the perspective of the recipient. It is important that his provision be handled in clear terms so as to better establish which information is indeed covered by the agreement.

Additionally, the Confidentiality Agreement will tend to include a provision on time that sets forth the schedule of when the information is to be kept secret; typically, these types of arrangements will allow for information to be disclosed well after the fact. But it’s important to check the terms of your own Confidentiality Agreement if you’re unsure about the terms as they apply to your own situation -- whether you are a Discloser or Recipient.

What are my responsibilities as the recipient of a Confidentiality Agreement?

These will be specifically outlined in the agreement itself. The common responsibilities to most Confidentiality Agreements are the obvious (the protection of privileged information), as well as an obligation to proactively protect information if the contract deems this is the case, and a time limit on the protection of this information. Generally, a Confidentiality Agreement will require little more than that from the Recipient’s point of view.

When is a Confidentiality Agreement valid?

Like all contracts, a Confidentiality Agreement must be signed as an agreement between two or more lawful parties who are of sound mind and willing to sign the contract, having not been placed under duress to do so.

The chief concern for Confidentiality Agreements is an issue known as “consideration.” Consideration refers, essentially, to the payment or benefits received by each party as a result of the contract. If a contract only contains consideration for one party, it may be an invalid contract because it violates laws on slavery and indentured servitude – in other words, in today’s legal system, one cannot use contract law to essentially force other people into action.

In order to provide consideration to both parties, either the Discloser will provide payment in exchange for keeping information confidential, or the agreement will take the form of an NDA in which the Recipient is agreeing to confidentiality in exchange for the privilege of employment. For other types of business transactions, the consideration is typically the "opportunity" to enter into some sort of business partnership (e.g. consultation relationship, joint venture, etc.).

When is a Confidentiality Agreement enforceable?

Provided that all of the above needs for validity have been met (including consideration), the issue then comes to the enforceability of the Confidentiality Agreement. These contracts are fully enforceable provided that they are fully valid and that it’s clear that one side has broken the agreement.

Articles For Confidentiality

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Why You Need to Read a Confidentiality Agreement in Full

If you’ve lived long enough, there’s a good chance you’ve seen one of them: a confidentiality agreement. Whether you’re signing one for a work project or because of a personal issue with another person, they can be pretty daunting. The extensive amount of fine print and “legalese” can be tough for anyone not well-acquainted with the law to tackle.

But that’s no excuse for not reading the fine print: in fact, it’s imperative that you do so especially if you’re not familiar with these types of documents. In this article, we’ll take a look at the ins and outs of a typical confidentiality agreement and tell you what you can expect – and what not to expect.

The more you know about these confidentiality agreements, the more you’ll see just why you should read everything you sign.

The Goals of Confidentiality Agreements

Most confidentiality agreements (also known as non-disclosure agreements) are written with a few goals in mind:

To give one of the parties legal recourse if you should make any of their trade secrets – or any information protected under the agreement, for that matter – public knowledge. Essentially, they can’t stop you from doing this, but having a confidentiality agreement in place gives them grounds for legal action for those “just in case” scenarios.
To protect business information from competitors. In some cases, these clauses can make many confidentiality agreements into de facto (though not official) non-compete agreements. Protecting one company’s information from another is standard practice in a number of business fields, so if you’re being urged to sign one at the start of a new job or project, remember that this is a normal procedure.

The ultimate goal of the confidentiality agreement, of course, is obvious: to protect information. But what if there’s something that you notice, as you read the confidentiality agreement, that seems out of place?

Unexpected Findings in a Confidentiality Agreement

This is why you don’t want to skim over a confidentiality agreement – or anything else you sign – simply because you think the agreement is a matter of routine: sometimes, extra “clauses” can be put into a confidentiality agreement that you simply don’t agree with.

For example, let’s say you’re beginning work at a new company, and they have you sign a Non-Disclosure or Confidentiality Agreement. Not a big deal, right? Most companies will have you sign this kind of form in order to protect this information.

But what if there’s a section in that agreement that deals with your capacity to work at other companies within the same field? Then the confidentiality agreement is crossing the barrier of its normal template into sketchy territory – you’ll want to bring it up with someone before you sign it.

And remember: just because someone tells you “that’s ok, sign it anyway” doesn’t mean that signing the document is suddenly okay. Signing the document is signing the document, no matter what they say. So be sure to read each confidentiality agreement in full, and make sure they look like the ones you find at FindLegalForms.com.

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Confidentiality Forms

Many of us are quick to make lawyer jokes in this day and age, but when it comes to protecting ourselves, our assets, our property, and our confidential information - we suddenly realize how important lawyers can be. Or, at the very least, the forms that they help draft up! These forms, like confidentiality forms, can be integral to making sure we maintain control over what we have the rights to control. And when it comes to the control of information, maintaining confidentiality was never so difficult as it is during the Information Age. That’s why confidentiality forms can be so vital to making sure we stay protected, well-covered legally, and that the information we want guarded stays guarded. And if we look at things from the other end of the spectrum, understanding just how weighty confidentiality agreements can be will be important, because we never want to violate confidentiality once we’ve signed an agreement saying we wouldn’t. Here’s why confidentiality forms can be so important - and how the language makes it so. First, it’s important to understand that confidentiality agreements can have a wide range of uses. For example, someone can require that you sign a confidentiality agreement simply when they ask you for financial advice - although this type of person can usually be a bit overprotective of their assets, you’ll also find that this over-protectiveness covers them well when it comes to the legal aspect of their property. Other situations that might call for confidentiality forms can include business transactions, medical arrangements, and other areas that would be considered vital to living our lives. But why confidentiality forms? Can’t most individual simply be trusted with the information they’re presented? Sure, many people can indeed be trusted with information - but there’s an old saying that goes “Trust...but verify.” Verifying that people can’t break confidentiality without also breaking the terms of a contract is a way to make sure that people adhere to the legally-binding aspect of your relationship with them, and could entitle you to file a lawsuit in certain cases. It’s important to remember just how important information is this day and age, especially when knowing a few passwords or numbers can be enough to gain access to all of your financial accounts online. A confidentiality form will include, typically, a number of provisions. First, it’s important to define which information is confidential - you might know one thing about a person that you can’t tell because of confidentiality, but that doesn’t mean you can’t share other information that wasn’t included in the agreement. There will also be terms and conditions that the person who is granted access to confidential information must meet as per the defined terms in the contract. Each confidentiality agreement is different, but generally you can expect these provisions to appear. If you’re asked to sign a confidentiality agreement, make sure that you read it in full to know what you’re signing. And if you’ve never been sure about sharing information, perhaps it’s time you start handing out a few confidentiality agreements of your own.

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Confidentiality Agreements

Confidentiality forms for use in various situations when parties agree not to disclose confidential information. These forms include general confidentiality agreements, employee confidentiality agreements, business plan, mutual and potential investor confidentiality agreements. Also included is an amendment which will effectively amend an existing confidentiality agreement.