A confidentiality agreement, or a non-disclosure agreement, is a contract which relates to the mutual or one-way disclosure of potentially confidential information. Any business who has concerns regarding the unauthorised disclosure of its sensitive or valuable information can benefit from having a professionally drawn up non-disclosure agreement.
It can be easy to trust in the people that you share your confidential information with will not disclose this information without your consent, however there are often parties who would abuse the trust and information that they are given. The sensitive information of a business can often be valuable to competitors. It is for this reason that it is vital to have a non-disclosure agreement in place before any confidential information is shared.
Non-disclosure agreements are especially important if you are involved in developing a new product or potentially patentable invention. Without a non-disclosure agreement in place it may be difficult to get a patent for the invention, if one has not already been filed.
How do non-disclosure agreements work?
Non-disclosure agreements are contracts that dictate what can and cannot be done with the confidential information disclosed by one party to another. Non-disclosure agreements most often cover how far a party may disclose information within its organisation, the purpose of the disclosure of information, the period during which the information may be used, how the information is to be stored, dealt with upon termination and what happens in the event of a breach of the agreement.
How will my agreement be drafted?
The type and style of the agreement will depend on the kind of information that is being shared. If a small amount of confidential information is being shared face-to-face, a short agreement in letter form may be appropriate. For the disclosure of sensitive documents or more sensitive information is revealed then a more complex non-disclosure agreement may be drafted. Ready-made agreements are not recommended as they are not tailored to your specific needs and may not provide the level of protection that is required.
What can happen without a non-disclosure agreement?
Disclosure of your sensitive information can prevent potential patent ability, as discussed above, but it can also mean that competitors can gain from information that they learn about your product or business financially. Your reputation may also be at risk if it becomes known that information that is supposed to be kept confidential has been disclosed.
What can happen is a party breaches the agreement?
One of the major benefits of having a non-disclosure agreement is that you can sue if a party breaches the terms of the agreement. This acts as a deterrent and means that remedy for the breach can be gained without difficulty. Without an agreement, it would be one party’s word against yours as to the intent behind the disclosure. The agreement should also specify what damages can be claimed and set entitlement to alternative relief such as an injunction.
Are there different types of confidentiality agreements, and how do I know which one is right for my business?
Yes, there are different types of confidentiality agreements, and the appropriate one will depend on the specific circumstances and the type of information being disclosed. Two common types are mutual non-disclosure agreements (where both parties share confidential information) and one-way non-disclosure agreements (where only one party discloses confidential information). JMR Solicitors can help you determine the most suitable agreement based on your business needs.
Can a confidentiality agreement be used with employees and contractors?
Absolutely, confidentiality agreements can be used with employees, contractors, consultants, and any other parties who may have access to sensitive information. These agreements are essential to protect your proprietary information and trade secrets, ensuring that your business remains secure.
Can a confidentiality agreement cover information that is already in the public domain?
No, a confidentiality agreement typically does not cover information that is already publicly available. However, it can cover the use and disclosure of information derived from or based on the publicly available information, especially if such information is combined with other confidential data to create a competitive advantage.
What steps can I take to ensure the effectiveness of a confidentiality agreement?
To ensure the effectiveness of a confidentiality agreement, it is crucial to clearly define what constitutes confidential information in the agreement itself. Additionally, implement secure systems to label, store, and restrict access to sensitive data within your organisation. Regularly remind employees and relevant parties of their obligations under the agreement.
Can I use a template or online form to create a confidentiality agreement?
Using a template or an online form for a confidentiality agreement may seem convenient, but it is not recommended. Each business has unique needs and specific information that requires protection. A professionally drafted agreement from JMR Solicitors ensures that all relevant aspects are covered, and your business’s interests are adequately protected.
Can a confidentiality agreement be used when sharing information with potential investors or partners?
Yes, confidentiality agreements are commonly used when sharing sensitive information with potential investors, partners, or collaborators. This ensures that the disclosed information remains confidential, fostering trust in business relationships and allowing for open discussions without fear of information misuse.
How long is a typical confidentiality agreement valid?
The duration of a confidentiality agreement can vary based on the nature of the information and the specific terms outlined in the agreement. In some cases, the agreement may be valid for a specific period, while in others, it may be valid indefinitely to protect information that remains confidential over time.
What steps should I take if I suspect a breach of the confidentiality agreement?
If you suspect a breach of the confidentiality agreement, it is essential to gather evidence to support your claim. Contact JMR Solicitors immediately to assess the situation, evaluate the potential damages, and explore legal remedies, such as seeking an injunction to prevent further disclosure.
Can a confidentiality agreement be terminated or revoked?
Yes, a confidentiality agreement can be terminated or revoked by mutual consent of both parties. Additionally, the agreement may specify conditions or events under which it can be terminated. JMR Solicitors can help you understand the termination provisions in your agreement and assist with any necessary modifications.
Can JMR Solicitors assist with enforcing a confidentiality agreement if a breach occurs?
Yes, JMR Solicitors can provide legal representation and support in enforcing your confidentiality agreement if a breach occurs. The firm can help you initiate legal proceedings and seek appropriate remedies, such as damages or injunctive relief, to protect your business’s interests.