Confidentiality Agreement – What is It?

Confidentiality agreement (“CA”) is a legal agreement between two people or two companies. This agreement obligates the other not to divulge or disclose information. Therefore, any information learned throughout the relationship applies. It ensures that the recipient protects the disclosures, intellectual property, or proprietary information. Because of this, a confidentiality agreement is an important document.

Differences between CA and NDA

A confidentiality agreement and a non-disclosure agreement (NDA) are very similar. For instance, both aim to protect disclosures, proprietary information, or intellectual property of a company. An NDA can be different in the sense that it can have other covenants or provisions within it. So, a confidentiality agreement is more broad, while an NDA is generally more specific. Uses of an NDA are more often in the context of a deal or a transaction. Uses of a confidentiality agreement occur more in the context of employment.

Confidentiality Agreement
Online options? Yay or Nay?

It’s not advisable to use these types of legal documents that you find online.

Why? Reasons include:

  • Online options are generic and it may not apply to your particular circumstance
  • It’s not tailored for use in your particular jurisdiction (in other words, it may not be enforceable in your particular jurisdiction)
  • You may not understand the implications or consequences

So, my advice is to always go out and get good legal counsel to help you.

In conclusion, always have an attorney review confidentiality agreements that you receive. I tell all my friends and family, “Make sure that counsel reviews anything you sign” — because legal contracts are binding. Otherwise, you may not understand what you’re signing or the degree of the legal implications. So, make sure you have appropriate counsel reviewing that document before you sign it.