A confidentiality agreement (sometimes referred to as a non-disclosure agreement) is an agreement entered into between parties that wish to create a confidential relationship with each other. The person who owns the confidential information is often referred to as the discloser and the person to whom the information will be disclosed as the recipient. Essentially, the recipient of the information undertakes in the agreement not to disclose the confidential information it receives. If the information is disclosed to a third party, the discloser has a right to claim damages.
Where possible, confidentiality agreements should define exactly what information is confidential and cannot be disclosed.
An exact definition may not be possible in certain situations, for example in an employer and employee confidentiality agreement, which would need to read broadly and include everything an employee may come across during the term of the employment. In this scenario all the employer’s proprietary information of a technical, commercial or financial nature etc may be included in a non-exhaustive definition of “confidential information”.
Lastly, the agreement should establish a time period during which the confidentiality obligation is to commence and be maintained, which will depend on the nature of both the information and the relationship.
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