Businesses understand the importance of protecting their business information from being disclosed to competitors or the general public to stay competitive and relevant in the marketplace. What many may not understand are the options available to help them protect this important information that is the lifeblood of the business.
Confidentiality Agreements (sometimes referred to as Nondisclosure Agreements) can be a powerful tool in helping a business protect its information from unpermitted disclosures that can threaten the prospects of the business. These agreements are binding contracts that require a person or entity to protect certain information and prohibit that information from being disclosed or used, except under certain circumstances.
Because of the importance of the business information to be protected and the damage that can result from its disclosure, in most situations a Confidentiality Agreement is a necessity as opposed to a luxury.
We maintain an open dialogue with our clients during the course of their business life cycle to alert them when a confidentiality agreement may be in order. Additionally, we assist our clients in determining the type and scope of information that can and should be protected, drafting agreements to maximize protections on behalf of our client.
Moreover, we provide guidance on the appropriate form of Confidentiality Agreements based on the situation, such as unilateral (one sided protection for the client), mutual (both parties agree not to disclose the information of the other, such as when two business are exploring a joint venture, combination or investment), or whether the provisions should be part of a larger agreement (such as a restrictive covenant agreement with employees or commercial contracts with clients or vendors).
Confidentiality Agreements should almost always be in place between a business and its employees or independent contractors, as those individuals often have access to much of the business’s information that is not known by others.