What is a Confidentiality Agreement?
A Confidentiality Agreement (also known as a Non-Disclosure Agreement or NDA) is a legal contract, which should be used when sensitive information needs to be shared between two parties. It helps to ensure that the person or organisation that gains access to sensitive information doesn’t disclose it to a third party. Often the agreement is in form of a Deed.
NDAs are often used:
- to protect confidential information or trade secrets;
- as a precursor document to intellectual property use (such as patents) or where contractors are to assist developing new products or ideas (such as a new App);
- for parties to be able to disclose sensitive information such as in the due diligence stages of a possible business sale or asset sale; or
- even as part of employment contracts where employees may used the protected information during their employment and only for the purposes of furthering the employer’s business.
The obligations in a Confidentiality Agreement can last for a specified period of time or can be indefinite in their operation. The Coca-Cola recipe, for example, has been kept secret for well over 100 years.
The document would generally state why the information is being shared (without actually disclosing the confidential information being protected!) and the measures to be taken to ensure it remains confidential and is not used for any reason other than the stated purpose.
Where both parties are disclosing information to each other, a two-way or mutual NDA can be used to protect both the disclosing parties.
Without a proper and enforceable agreement, the party receiving the information may be able to do whatever they like with it. That said, just because you have an agreement, doesn’t mean it will be followed. Confidentiality Agreements also often deal with the consequences of misuse or unauthorized disclosure.
For further information, please contact McKillop Legal on (02) 9521 2455 or email firstname.lastname@example.org
This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.