A confidentiality agreement is used in order to protect certain information that is secret or that is not intended to be shared with the general public. They are often used in an employment law setting. For instance, an employer may require a new employee to hire a confidentiality agreement, which states that the employer will keep company information confidential.
Confidentiality agreements operate essentially like a contract. Both parties must consent to the terms, and a breach of a confidentiality agreement can result in legal penalties. Confidentiality agreements are typically restricted to refer only to certain points of information that are sensitive or important.
As mentioned, confidentiality agreements are often used in the context of the employee hiring process. In fact, the worker’s employment contract may often have a confidentiality agreement built into the overall contract.
Business confidentiality agreements may also be used between businesses that are working together as partners. This is common for companies that choose to do collaborations together and sell or market their products in a joint package. Here, the companies will need to create confidentiality agreements so that their trade secrets do not leak into the public consumer base.
Lastly, confidentiality agreements can also be used by individuals who need to keep information private between themselves. Since confidentiality agreements are basically contracts, the parties can set up documents that pertain to confidentiality and have them signed so that they are legally effective.
An example of this is where two persons wish to go into business together soon in the future. They may wish to create a confidentiality agreement regarding a patent that they are working on, other similar projects.
Breaches of confidentiality agreements are typically treated like most other breach of contract claims. In most cases, a breach of such agreements will lead to a damages award for any losses caused by the breach of confidentiality. Note that, in some cases, such a breach can actually cause a great deal of losses, especially if the business’ trade secrets are disclosed without authorization. Enforcing a confidentiality agreement may also involve the breaching party returning information that they have taken for personal use.
Confidentiality agreements are important legal arrangements between two parties. You may wish to hire a business attorney if you need help drafting, reviewing, editing, or disputing a confidentiality agreement. Your attorney can help you go over the agreement to determine what your rights are. Also, a qualified lawyer in your area will be able to represent you in court if you need to file a lawsuit for damages.