What is a confidentiality agreement
A confidentiality agreement is also referred to as a non-disclosure or secrecy agreement by signing which someone agrees not to disclose any information regarding a particular topic in an organisation. It is usually prepared by companies when they don’t want information to be released to others in the organisation or to the general public. They are signed to protect the interests of the firm so that business secrets are not leaked to rivals, to protect new products or technical ideas.
A confidentiality agreement is mainly used for the following purposes:
- Protection: A confidentiality agreement helps to protect sensitive information from disclosure to others and if anyone who has signed this agreement breaches these terms and conditions, legal action can be taken against him.
- Patent rights: A confidentiality agreement is also used to prevent violations of patent rights. If anyone discloses information about an invention he can be fined as a forfeiture of patent rights.
- Information: A confidentiality agreement lays down what information can and cannot be divulged to the public and this makes it easy for both the parties to know what their boundaries are.
When creating a confidentiality agreement, one can follow these tips:
- The agreement must mention a time period within which confidentiality must be maintained, after which information be divulged.
- The agreement must clearly specify what particular information is required to be kept as business secret and what can be revealed.
- The name and the designations of the signatories must be mentioned clearly.
- In case of an employee confidentiality agreement, the employee may be asked not to disclose trade secrets, client or product information, strategic plans, salaries and so on.
- Some confidentiality agreements offer an option under which the employer may allow or give permission to the employee to divulge the information due to certain special circumstances.
Category: Sample Agreements