Confidentiality agreement
Confidentiality agreement
Confidentiality agreement
Developing a unique product or idea can often be crucial to the success of a new business. Sharing new knowledge and original work which you intend to use commercially requires a highlevel of mutual trust. It is essential that you consider confidentiality before approaching another company or individual when seeking to develop your ideas. The UK law of confidentiality is the right to prevent disclosure of confidential information acquired in confidential circumstances.
Confidentiality agreement, also known as non-disclosure agreement (NDA), is a legal contract between you and another party not to disclose information that you have shared for a specific purpose.Typically, you agree to disclose information to them for a specific purpose, while they agree not to disclose that information to anyone else. This allows you to share your trade secrets with business partners while preventing them from passing this information on.
As well as using confidentiality agreements with your clients, suppliers, resellers and advisers, you can also use these agreements with your employees and with journalists to whom you want to give a 'sneak preview' of financial, technical or new product information.
Confidentiality agreements can cover:
trade secrets - e.g. a formula, programme or process
technical drawings and designs
mathematical and chemical formulae
business plans
customer and prospect lists
Information qualifies as a trade secret or confidential when it is not known in the public domain and is valuable only as long as it remains secret or confidential.
Confidentiality agreements between you and public bodies need to be carefully considered because any information that you might provide may be disclosed under the terms of the Freedom of Information Act 2000. This gives anyone the right of access to information held by public authorities.
If you need to approach potential business partners, have a clear idea beforehand of what you want to share with them - and stick to it. This minimises the risk of breaches of confidentiality
Confidentiality agreement allows businesses to approach potential partners, suppliers, consultants and customers with their idea, knowing that the other party is legally forbidden to pass on that information. These agreements can be tailored to your requirements.
A one-way confidentiality agreement is used when only one business is sharing information and the other agrees to keep it confidential. A two-way confidentiality agreement is used when both businesses are sharing confidential information with each other and want to be sure that neither will disclose their trade secrets.
In the agreement, it is a good idea to specify:
how the information can be used
any restrictionsonthe use of the information you provide,e.g.preventing the recipientfrom making copies
that the owner retains the intellectual property rights, copyright or possible patents
The key clauses will be those detailing:
protection against the copying or retention of confidential information
protection against disclosure of information not already in the public domain
a remedy, e.g. compensation, for any breach of the agreement
Once you sign a confidentiality agreement, you have entered into a legally binding contract. This allows you to share ideas with business partners while preventing them from passing this information on.
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