A confidentiality agreement is a legal document signed between two or more parties for certain purpose. The article below elaborates on this concept and provides you with a confidentiality agreement template as well.
As the name suggests, confidentiality agreement is signed when parties involved in the contract do not want to disclose the information to the third party. It is generally signed between individuals, companies, corporations, societies, etc., who want to share knowledge, information, business strategies, trade secrets, or any other confidential information with each another. Any third party is restricted from accessing this information.
Within a contract period, if any of the party discloses confidential information to the party outside the contract, it is considered a crime, and is liable to punishment. It is also known as a non-disclosure agreement. It can be unilateral or mutual. In the former agreement type, only one party shares information with another and wants to keep it confidential. In the latter, both the parties share confidential information. The agreement is essentially signed by the lawyers of respective companies. Given below is a template and example, that will explain to you what confidentiality agreement is all about.
Confidentiality Agreement Example
Suppose, a company manufactures a popular cola drink, and there is one more company into cola manufacturing. They both decide to come together and share the cola drink ingredients and marketing strategies hoping that this may improve the sales of their cola drink, fetching them more revenues and profits. This would be beneficial to both the companies to establish their monopoly in the market. But, if either of the company, shares the other company’s secret with a third cola manufacturing company, then the victim company may have to suffer severe losses. In order to avoid this, both the companies sign the confidentiality agreement, which is a legal document.
Template for Confidentiality Agreement
Date: (date on which the agreement is signed)
Here, the name of the parties involved in the contact is written. Along with names, a brief profile of the parties have to be mentioned. For example, name of the company, its financial status, accounts, patents, ideas, copyrights, current activities, report of the past programs, etc.
Definition of Confidentiality
The parties must include definition and clauses, that they have unanimously concluded as, confidentiality. It must explain which information is covered under the term confidentiality. It can be business strategy, USP item, or any other idea. This definition should also include what does not come under this agreement. It should have clauses that, define what will be considered as breach of confidence, and what is the probable punishment and penalty, the duration of time till which the contract will be valid, various provisions or permissions considered, etc. Basically, every detail of the contract should be mentioned here.
Declaration by the Associated Parties
In this section, you are required to give the declaration, that you will abide by all the rules, statements, and provisions made in the contract. Generally, the declarations are written in the following manner:
“We accept that disclosure of the above mentioned information, that is regarded as confidential, will result any legal proceedings. Any such disclosure of the confidential matter done without any provisions mentioned above, will make the party concerned liable to punishment or penalty. The above mentioned confidential matter can only be disclosed to permitted parties by seeking above mentioned provisions. The confidential matter disclosed otherwise would be considered as breach of confidence. We unanimously agree to the above contract and we are aware that the contract is legally binding for the parties involved.“
The declaration is signed by all the parties involved, with their signature, name, ID proof, and address. Then, this signed document is taken to the court and signed by the respective lawyers. After this, the document gets the legal stamp on it, i.e., the sign of legal approval. Once the contract is legally recognized, one copy is submitted to the court, and at least one copy is given to the each party involved. If the companies wants, it can permit their respective lawyers to have one copy.
Signed on Behalf Of: (Name of the partner/client A)
By, ____________(Name of the lawyer A)
Signed on Behalf Of: (Name of the partner/client B)
By, ____________(Name of the lawyer B)
(if more parties are involved, then signatures of their lawyers are required)
The above template gives an overview about contents of confidentiality contract. You can personalize it as per your requirement. You can refer to this confidentiality agreement template to maintain confidentiality in the work place or during any business communication and keep your information secret legally.