Confidentiality agreement

About this confidentiality agreement

There are lots of situations where you might want to disclose a creative piece of work to someone else. You may be at concept stage and want ideas or help in developing it, or you may have developed it fully, but want to manufacture, sell or use it. The other party (whether a business or individual) to whom you divulge may be in a situation to be able to benefit from the using the information (perhaps in direct competition against you) or the passing of it on to someone else. You can use this confidentiality agreement to prevent them from copying your ideas or acting on the information and thus you can protect your personal or business information or ideas.

This agreement is about how sensitive information will be kept confidential. The actual nature and subject of the information is not important to agreement of how it will be used. Therefore, there are many situations in which this document can be used. Of course total secrecy is best.  But there are many occasions in life when disclosure is necessary.

The information protected by this confidentiality agreement could be anything: physical or conceptual, developed or undeveloped, business or personal. This document is drawn broadly to cover all information passing to the other party, but in a way that enables you to insert your own precise secrets if you want to specify them.

The document gives you choices as to how you want the recipient of your information to deal with it. You may limit disclosure to the person who signs this agreement or you may allow him to pass the information to professional advisers or employees or consultants.  You decide.

Points to consider in how you manage confidentiality and non-disclosure

A non-disclosure agreement (NDA) is, for all purposes, a different name for a confidentiality agreement. “Non-disclosure agreement” is more commonly used in the USA and tends to suggest protection against passing-on of information alone rather than use of the information as well. The law in this agreement is basic contract law. It is strong and clear.

You should recognise that all the legal agreements in the world cannot prevent accidental or unintentional disclosure (for example, careless talk over a drink with a friend, or when leaving your documents out for public rubbish collection). A good confidentiality agreement (like this one) should therefore also cover what happens if the information is used or disclosed.

You can also manage risks by limiting the information that you disclose, and the people who know about it. Both these things are covered by this non disclosure agreement. Both individuals and business owners tend to be most diffident about asking for a confidentiality agreement from people they “trust” with their ideas, but who have no obligation to keep confidentiality (for example, friends, relatives, potential investors, partners and customers). This is a great mistake. The upside of protection from insisting on an agreement far outweighs the downside of loss of private data.

Once enough information has been exchanged for terms of a deal to be agreed, a Net Lawman agreement (for example, a business sale agreement) will record the details and continue the requirement for confidentiality for as long as necessary.

When to use this confidentiality agreement

Either party can initiate use of a confidentiality agreement. If you are the receiver of information, you can make the other side at ease by suggesting the use of one before they do.

The agreement should be signed before information is disclosed.

Examples of when this confidentiality agreement might be used include:

• You are disclosing an idea or piece of information
• You are showing someone a work of art or a prototype design
• You are revealing a new process that will be valuable to the other party
• You are showing someone how something works (like showing the source code of software)
• You are looking for feedback on your ideas
• You wish to show someone an idea for a book, film or play
• You wish to show a manufacturer or developer your work

Net Lawman also sells other similar agreements for slightly different circumstances:

Two or more parties are disclosing information to each other: Mutual confidentiality agreement.

Only one party is disclosing information to others: Confidentiality agreement: single party disclosure.

Information is being disclosed to a consultant, contractor or supplier: Confidentiality agreement: consultant, contractor or supplier.

Confidentiality agreement features and contents

• Either or both parties can be individuals or businesses
• Can be used to protect defined information, or generally
• The subject and nature of the information being kept confidential can be anything

The paragraphs in the agreement include:

• Interpretation
• Definition of the confidential information: can be as broad or specific as you like
• Excluded information
• Non-disclosure
• Security of disclosed information: how information must be kept and stored
• Ownership and warranty
• Undertakings not to steal customers and staff
• Other legal provisions to protect your interests