What is a Confidentiality Agreement

Confidentiality Agreement which is also known as non-disclosure agreement or NDA, is simply a contract between two or more parties where the subject of the agreement is a promise that information conveyed will be maintained in secrecy.

These agreements can be mutual agreements, where both parties are obligated to maintain secrecy, or they can be unilateral agreements, where only the receiving party becomes obligated to maintain secrecy.

Mutual confidentiality agreements are useful when both parties will be conveying confidential information, such as for inventor groups.

Unilateral confidentiality agreements, which are probably most common in the inventing arena, are used when only one party is turning over confidential information, perhaps to a potential investor or prospective licensee.

You can use a nondisclosure agreement to protect any type of information that is not generally known. The creation of a confidential agreement is really the creation of a confidential relationship. Generally speaking, such confidential relationships can usually be created both in writing and orally. It should be noted, however, that while some court cases in some jurisdictions do allow oral creation of such a relationship, and some court cases in some jurisdictions do allow actions to be used as evidence of the creation of such a relationship, YOU SHOULD NEVER RELY ON OR ANTICIPATE THAT A COURT WILL ENFORCE AN ORAL AGREEMENT OR AN AGREEMENT BASED ONLY UPON ACTION.

The reason you should never rely upon an oral confidentiality agreement is simply because it is exceedingly difficult, if not impossible, to prove the existence of an oral agreement and/or actions that suggest the creation of such an agreement. This is because of the “he said she said” problem. Essentially, a case that relies upon an oral agreement will be decided based on who is believed. Don’t put yourself in this situation if you can at all avoid it. It is my opinion that you should always get the agreement in writing (whenever possible), even if you need to water it down a little to get a signature.

CONFIDENTIAL INFORMATION

• The Consultant, its employees or agents may for the purpose of this agreement obtain access to certain Confidential Information belonging to the Company.
• The Consultant covenants and agrees that it will at all times keep confidential the Confidential Information and that it will not directly or indirectly disclose to any person at any time the Confidential Information.
• The Company and the Consultant acknowledge that information resulting from the activities of the Consultant or its employees, agents or consultants pursuant to this agreement will be regarded as Confidential Information and the Consultant agrees that the covenant contained in the Clause 5.2 referred to above refers to such information.
• The Consultant will ensure that before any of its employees, agents and consultants have access to Confidential Information each such employee, agent or consultant enters into a Confidentiality Agreement with it in the terms set out in schedule 2. The Consultant will forward a copy of such agreement to the Company as soon as each such agreement is entered into.
• The Consultant’s obligations and the obligations of the Consultant’s employees, agents and consultants with regard to Confidential Information will continue for so long as such information is maintained on a confidentiality basis by the Company in the case of Confidential Information pertaining to the business of the Company or the relevant client of the Company in the case of Confidential Information pertaining to the business of such client.
• At the termination of this agreement or when directed, all Confidential Information must be returned to the Company including copies of all Confidential Information or any extracts or summaries of the Confidential Information that the Consultant makes and any software that the Consultant creates based on the Confidential Information. At such time the Consultant will also erase and destroy any copies of any software containing or comprising the Confidential Information in the Consultant’s possession or under the Consultant’s control or that may have been loaded onto the Consultant’s computer.
• The Confidential Information does not include information which is generally available in the public domain except where that has been a result of disclosure by the Consultant, its employees, representatives or associates in breach of this agreement.

What is a confidential agreement?