Confidentiality agreements are contracts entered into by two or more parties in which some or all of the parties agree that certain types of information that pass from one party to the other should be kept confidential. A well designed confidentiality agreement template will help you develop a professional confidential agreement and save you time in the future.
Confidentiality agreement guide
Confidential agreement can help business and related parties to protect their rights and private information. Confidentiality agreements can protect sensitive technical or commercial information from disclosure to others. Moreover, the use of confidentiality agreements can prevent the forfeiture of valuable patent rights. Under U.S. law and in other countries as well, the public disclosure of an invention can be deemed as a forfeiture of patent rights in that invention. A properly drafted confidentiality agreement can avoid the undesired—and often unintentional—forfeiture of valuable patent rights.
Confidential agreements are commonly used in business transactions or process evaluation. Companies often use confidential agreement to prevent the flow of the protective and patent information from spreading. Confidentiality agreements are often signed when two companies, individuals, or other entities are considering doing business and need to understand the processes used in each others business for the purpose of evaluating the potential business relationship. Companies also use non disclosure agreement signed between companies and employees to protect their interest. Some employment agreements will include a clause restricting employees' use and dissemination of company-owned confidential information.
Confidential agreement can be divided into unilateral agreement or mutual agreement depending on the flow of information. With regard to unilateral agreement, one party wants to disclose certain information to another party but needs the information to remain secret for some reason or to make sure that the other party does not take and use the disclosed information without compensation. In mutual agreement, both parties will be supplying information that is intended to remain secret. This type of agreement is common when businesses are considering some kind of joint venture or merger.
Confidentiality Agreement Template
When designing your confidentiality agreement template, you should first check what information should be deemed as confidential. It is very important that the recipient include these exceptions in the confidentiality agreement.
The first section of the confidential agreement template is to define the confidential information scope. The core of the confidentiality agreement is a two part obligation on the receiver of the information — that he has to keep the confidential information confidential and that he can't use the confidential information himself. This usually means that he has to take reasonable steps to prevent others from gaining access to this private information.
The second part of confidential agreement template is about confidential information terms: How long should the confidentiality agreement last? The agreement must establish a time period during which disclosures will be made and the period during which confidentiality of the information is to be maintained.
The last part of confidentiality agreement template is about use of the confidential information. In the section, you need to state clearly how the recipients can use the information. For example, The recipient may use the disclosing party’s confidential information only for the purpose of , and only to the extent required for that purpose. The Recipient must not use the disclosing party’s confidential information for any other purpose without the explicit written approval of the disclosing party.