05 Feb Confidentiality Agreements Explained
- What is a confidentiality agreement?
Despite its many different names, a confidentiality agreement (also known as a deed of confidentiality or a non-disclosure agreement) is an agreement that protects sensitive and confidential information of a business or entity.
- What types of confidentiality agreements exist?
A confidentiality agreement can either be one-way (formally known as a unilateral agreement) or mutual. In the former, only one party agrees to keep certain information confidential. In the latter, both parties agree not to share each other’s confidential information.
- What is covered?
The most crucial part to a confidentiality agreement is ensuring the correct drafting is applied to what is meant by “confidential information”. A failure to correctly draft such a definition may mean that certain information which you intend to be confidential is not caught by the strict obligations outlined in the agreement.
- The length of the agreement.
The term of a confidentiality agreement can vary from a few days or weeks to several years. It will ultimately depend upon the nature of the information and the context in which it is being disclosed in order to determine the appropriate length upon which the agreement should apply.
It is important to draft the agreement with an appropriate term. Any unreasonably lengthy term of an agreement, or an agreement for an infinite period of time, may be found to be unenforceable by a Court. Legal advice specific to your situation should therefore be obtained to ensure that your agreement will withstand any legal challenge as to its validity.
- The reason we have them
A confidentiality agreement ensures that the parties can freely disclose information that is confidential or commercially sensitive in order to carry out various tasks. It is particularly important when entering into business discussions with new suppliers or vendors, or where a company wishes to discuss its operations with investors.
- When are they enforceable?
A confidentiality agreement is only enforceable where it is properly drafted, is reasonable in the circumstances, and signed by the parties. You should ensure that until the agreement is signed, no information is disclosed to the other party that is confidential in nature.
The team at Distinction Legal are experienced when it comes to drafting and negotiating confidentiality agreements for you and your business. Contact us today to discuss how we can protect the interests of your business.