How to Create a Confidentiality Agreement

It's essential for businesses to protect their profits by protecting their information from anyone who doesn't need to have it, and that means your employees need to agree to the secrecy of their confidential information and trade secrets by signing a non disclosure agreement. Some assume that an IT confidentiality agreement is needed only for those who work in technology. However, the non disclosure agreement doesn't just protect customers, a software patent, copyright, or patent application. It also protects the ideas and plans of the company, which, if revealed to the public could void a company's right to seek a patent or trademark for new products, or may otherwise damage their competitive edge.

What is a Confidentiality Agreement?

A good confidentiality agreement template will outline the important elements of the non-disclosure agreement, or NDA. A confidential disclosure agreement must make it very clear which information needs to remain private, as well as any potential consequences an employee may be subject to in the event of a breach of confidentiality, since the disclosure of information can potentially cause real damage to a company.

In addition to the agreement of non disclosure, the confidentiality agreement template should also include a non compete agreement. It is not unusual for employees to hold second jobs or even do some freelance work. With a noncompete agreement, the parameters of what is and is not acceptable should be clearly defined. A good non disclosure agreement template will do this. US Legal Forms offers a wide selection of sample non disclosure agreements, as well as a sample of a confidentiality agreement in a forms package at significant savings.

The basic nondisclosure agreement begins by identifying the party who has, or may potentially have, confidential information - the disclosing party, and the party, or person who is to receive that information - the receiving party. It goes on to define what is to be considered confidential information, such as patents, expansion plans, or the development of new technology. If there are exceptions to when a receiving party is allowed to reveal otherwise privileged information, for example, if the information is released to the public, this too should be outlined in the NDA.

It will also state the extent of the responsibility of the receiving party to keep necessary information away from those who are not authorized to have it. This means not only do they not tell others about the information, but if necessary, they will actively take steps to assure that no one is able to breach security and obtain the information without the proper authorization. While there may be circumstances where a court will rule that some information be disclosed, the NDA should make it clear that a partial disclosure will not void the entire agreement, and remaining information should still be kept private.

Confidentiality agreements will also indicate the time period that the confidential disclosure agreement will be valid and will identify the potential consequences should a breach of confidentiality occur. Once the confidentiality agreement sample is drawn up and read carefully, an authorized person representing the disclosing party and the receiving party will both sign the non disclosure agreement sample, creating clear expectations of how to handle both customer or client information, as well as the intellectual property of the business.