A confidentiality agreement is used by two companies at the commencement of new work therefore it should be in standard written form. It is important to bind all parties to conceal sensitive information from outsiders. The confidential contract is a clear indication that the information is private and only for the contract parties. This type of contract is used as an incentive to build trust between parties and is often used for legal battles. A confidentiality agreement is also known as a non-disclosure agreement and these types of contracts are often used by employers to prohibit employees from disclosing confidential details to the general public and other people. Confidentiality contracts are necessary to guard confidential information and trade secrets.
Nature of Confidentiality Contract
Confidentiality contracts are legally binding therefore these should be designed in written form. It is also known as a binding contract as it serves as a guarantee for the protection of your confidential information and business secrets.
Functions of Confidentiality Contract
Confidentiality contracts are designed for the protection of private information from the public. These contracts often comprise details of secrets or information that should not be disclosed to the public by the parties of the contract. Usually, the employer takes the sign of an employee on a confidentiality agreement to bind him/her to secrecy. Usually, this contract has three major functions:
- Protection of sensitive information related to your business or project.
- Prevent forfeiture of patent rights.
- Clear definition of confidential information that is necessary to conceal from other people.
Here is a preview of a free Sample Confidentiality Contract Template created using MS Word,
Things to be Written
The following are some important points that should be included in the confidentiality contracts:
A confidentiality contract should specify the details of the parties entering the contract and the ways to handle confidential information. The contract should contain a period for which parties are bound not to disclose confidential information to a third person or the general public.
This contract can be long and wordy and often contains complex legal jargon. You are advised to consult your legal adviser before signing these contracts to understand complex legal jargon.
If a confidentiality contract is written for employees then the contract will include employment terms, duties, restrictions, termination policies, and non-solicitation agreements. For instance, while hiring a salesperson the contract will state that the person is not allowed to work for the competitor in a specific area for a specific period even after quitting his/her job.
External contract agreements are made between contractors, consultants, potential employees, and vendors. These contracts cover secret information of the company according to the license and the business policies.
Significance of Confidentiality Contract
A confidentiality agreement is a legal contract that requires two or more than two parties to enter. It is an important document for the protection of your secret information therefore it is essential to take the consent of all parties before writing such contracts. After signing this contract, all parties become responsible for protecting the private information of the company or project. The nature of information can be varied for the contract such as data, drawings, results of a test, facts of computer software, business tools, etc.
Here is the download link for above shown Confidentiality Contract Template,
