Confidentiality and Nondisclosure Agreements

There are numerous instances where it is desirable to share confidential information with another party. But, the key to doing so is making sure that the other party will be bound to respect the confidential

The common way to protect the secrecy of confidential information given to another party is through the use of a Confidentiality Agreement, which is sometimes also referred to as a Non-Disclosure Agreement.

When does it make sense to require another party to sign a Confidentiality Agreement? Well, there are probably many instances where it might be appropriate. The principal situations are when you wish to convey something valuable about your business or idea, but you want to ensure that the other side doesn't steal the information or use it without your approval.

Here are some typical situations where a Confidentiality Agreement is often used:

• An invention or business idea will be presented to a potential partner, investor, or distributor
• Financial, marketing, and other information will be shared with a prospective buyer of your business or co-venturer
• A new product or technology will be shown to a prospective buyer or licensee
• A company or individual will be providing you with services and will have access to some sensitive information in providing those services
• Employees will have access to confidential and proprietary information of your business in the course of their job