What is an Confidentiality Agreement?
A Confidentiality Agreement (also known as a Non-Disclosure Agreement or NDA) is a commercial agreement between two parties to protect confidential information and not disclose it to a third party.
Confidentiality Agreements are very common when:
🔹 hiring employees/contractors
🔹 negotiating business contracts with other businesses
🔹 pitching to potential investors
🔹 sharing commercially sensitive information with suppliers/partners.
You should always get the agreement signed by both parties before you reveal any confidential information to make sure it’s effective.
Do I need a Confidentiality Agreement to protect my confidential information?
If you want to protect your ideas, trade secrets or sensitive information from being copied or stolen, a Confidentiality Agreement is essential.
Even if you’re just in early discussions with another party, you should get a Confidentiality Agreement signed to be safe.
Confidentiality Agreements generally enable parties to reveal information with commercial value that they might otherwise keep secret, so that commercial negotiations can continue openly and honestly. Breaking a confidentiality agreement may result in the owner of the confidential information taking legal action.
Are there any other names for a Confidentiality Agreement?
Yes, you might have also heard this contract referred to as a Non-Disclosure Agreement, NDA, Secrecy Agreement or Proprietary Information Agreement.
All of them are basically the same thing, just different names for a contract you use to protect confidential information.
What does this Confidentiality Agreement template include?
Our Confidentiality Agreement template covers everything you need to keep your information secure:
★ Parties – who the agreement is between
★ Confidential Information – the types of confidential information to be protected;
★ Confidentiality Obligations – the obligations of the parties to the confidentiality agreement
★ Disclosure – rules around disclosing information
★ Non-solicitation – to prevent one party from enticing employees, customers, suppliers or potential investors away from the other party
★ Term – how long the agreement is valid
★ Return on Request – either party can request for the other party to cease using the information and return it (along with any notes)
★ Indemnity – a legal term to protect against losses and damages
This confidentiality agreement template is a mutual confidentiality agreement, which means both the parties entering into the contract agree not to disclose any confidential information provided to them by the other.
What’s the difference between a unilateral and a mutual agreement?
There are two types of confidentiality agreements – one way and mutual.
In a one way (“unilateral”) agreement, one party discloses information to another party and that party agrees not to disclose the information.
In a mutual (“bilateral” or “reciprocal”) agreement, both parties agree not to share the other’s sensitive information.
What is the difference between an NDA and a confidentiality agreement?
There is no difference between a a non-disclosure agreement (NDA) and a confidentiality agreement. Both of them are binding legal contracts in which at least one party agrees not to divulge certain information.
How long does a Confidentiality Agreement last?
The duration of a confidentiality agreement can vary depending on what you are using it for. There is no standard length of time – you could set the term for 1 year, 2 years, 5 years or indefinitely (in perpetuity). Our Confidentiality Agreement template includes a field where you can change the term to suit your requirements.
What is confidential information?
Confidential information can be almost anything. It can include a business idea, concept, plan, strategy, design, process, financial information, customer information or a trade secret.
It can take the form of documents, graphics, text, data, files, designs, drawings, technical specifications, systems, processes…and the list goes on. You get the idea!
Confidential information can be any information that is not public knowledge and that the holder of the information wishes to keep private.
What information is not protected by a Confidentiality Agreement?
You cannot protect all types of information with a Confidentiality Agreement. Information that is already public knowledge or becomes known through no fault of the receiving party cannot be protected by a Confidentiality Agreement (e.g. information that is disclosed and obtained from a third party).
Is an agreement still legal if it hasn’t been signed?
It’s possible for a verbal agreement to be legally binding, but it’s extremely difficult (if not impossible) to prove, so it’s important to make sure that both parties sign the Confidentiality Agreement before you disclose any confidential information.
Is this Confidentiality Agreement template legally binding?
All of our templates have been drafted by qualified Australian lawyers who hold an Australian legal practicing certificate.
We are affiliated with a commercial law firm based in Sydney.