Confidentiality agreements

 

Many businesses are successful because no-one else can do what they do.

In order to ensure this remains the case, it is common for them to require their employees to sign confidentiality agreements. These may be included as part of the contract of employment itself, or they may be a separate document.

Sometimes it is necessary for companies to protect their secrets from disclosure by outsiders. In these cases they may ask that a Non-Disclosure Agreement (NDA) is granted before revealing their confidential information.

Operation and structure

Most confidentiality agreements present the same information and are similarly structured. There are two types of confidentiality agreements:

  • A mutual confidentiality agreement would be used if you want all parties bound by confidentiality
  • Unilateral confidentiality agreements are used if only the receiving party must maintain secrecy

Regardless of the type of agreement both parties should ensure they are happy with the terms it contains as they are bound by them.

Precisely specifying the information that needs to be protected and the treatment of the information are probably the most important clauses, and a balance must be struck between legal protection and the ease of getting the agreement signed by the other party.

Naturally, the more one-sided an agreement is, the more difficulty there will be to get the other side to sign. As a rule, the agreement should be drafted as narrowly as possible, in order to prevent compliance becoming too onerous.

Breach of confidentiality

Most confidentiality agreements and NDAs are never breached. However, if they are, the business concerned must consider whether to take action. This will usually depend upon the nature of the breach, what damage has been caused, and whether the person who made the disclosure is worth pursuing.

A commercial solicitor will usually be asked to recommend a course of action.

There are some cases in which confidentiality may be breached despite the existence of an agreement. Whistleblowers are protected by law and it is not possible to prevent evidence of illegal activity being disclosed.

Even attempting to prevent such disclosure can be damaging to the reputation of a business, and the correct course of action is always to resolve the illegality as quickly as possible. Legal advice will be crucial under these circumstances.

Confidentiality agreements are legally binding documents and should be drafted on a case-by-case basis by a specialist solicitor. If your business is considering entering into one, call us to speak to one of our advisors.

If you are not sure whether a confidentiality agreement is appropriate in your case, you can learn about other forms of protection on our intellectual property pages.

If you would like to obtain legal advice on confidentiality agreements then we can put you in touch with a local contracts solicitor free of charge. If you have any questions or would like our help in finding local contracts solicitors please call us on 08001 221 2299 or complete the web-form above.

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