Elements of a Confidentiality Agreement

Confidentiality agreements, also known as nondisclosure agreements, are common in the business world. Confidentiality agreements are created by business lawyers to prevent confidential information from being shared outside of approved parties. If you are asked to sign a confidentiality agreement, or if you need to create a confidentiality agreement of your own, then it’s important to understand the necessary elements of a confidentiality agreement.

Confidentiality agreement document with pen close-up

Definition of the Information Considered Confidential

A confidentiality agreement helps to prevent confidential information from being shared, so one of the most important elements of a confidentiality agreement is the definition of what information is confidential. The more specific this definition can be, the better – you may decide to define confidential information based on the date that the information is disclosed, the specific content of the information, or the method in which the information is conveyed (for instance, all written correspondence is to be considered confidential).

Identities of Participating Parties

Confidentiality agreements are signed between two or more parties. They are sometimes used by military lawyers in an effort to protect their hazardous waste disposal clients. A good confidentiality agreement will identify each party and its role in the agreement. The discloser in the agreement is the company, business, or individual who has created the agreement to protect their own information. An agreement may include one or more recipients who, in signing the agreement, accept the need to keep specified information confidential.

Limits on Confidential Information

Confidentiality agreements can be tailored to suit each individual situation. For instance, a business may have employees sign confidentiality agreements which prevent them from discussing patent information outside of the business, unless they are corresponding with the patent registry. A confidentiality agreement needs to define the specific limitations on the use and application of confidential information. It should also identify any exemptions to the restrictions that have been laid out. The more specific the rules and restrictions are in the agreement, the easier it will be to enforce the agreement in the future.

Term of the Agreement

Any confidentiality agreement needs to include the term, or period of time, for which the agreement lasts. The term included will depend on the nature of the information that you seek to protect – terms can vary, but usually cover periods between 3 and 5 years. In addition to defining the term, the agreement should also include the date it was signed.

A confidentiality agreement is a legally binding document which serves to protect sensitive information. But for an agreement to be effective, it needs to contain the necessary elements of a confidentiality agreement. It is best to consult with a personal injury lawyer to make sure that your agreement contains all of the important elements.