A Confidentiality Agreement is a contract to not disclose certain information.
It is very common, for example, in many workplaces for an employer to have their employees sign this type of contract before they begin their employment to ensure they do not divulge company information. In almost all types of employment there is information that a business does not want a competitor or the general public to know such as trade secrets, business plans, internal operations but most importantly to ensure client privacy is protected. This is often done through the use of a confidentiality clause in their employment agreement or a confidentiality agreement alone.
Having an employee sign a confidentiality contract will make the employee liable to the employer for disclosing any sensitive information gained during the course of their employment. These agreements typically survive the term of the employment, putting a long lasting duty of confidentiality on an employee not to ever disclose certain information even after they have left the company.
As soon as the employee signs a confidentiality contract they then have an obligation to ensure that none of this information becomes public in any manner, either accidentally or intentionally. In addition, a confidentiality agreement will prevent an employee or former employee from disseminating the information gained in many forms, whether it is in hardcopy digital or dissemination of information through word of mouth. Thus, confidentiality agreements have a very wide scope.
Confidentiality Agreements outside employment contracts
These agreements can also be tailored to specifically outline certain types of industry related information that must be kept confidential. For example, it may be tailored to particular patient names and treatments at a private clinic, a specific recipe used to make a product or similar specified information, however most of the time the agreements are very broad.
Confidentiality clauses are not only used between employees and employers but also between individuals who may be discussing a business plan, trade secret or other similar sensitive information. Another common scenario where a confidentiality agreement is used is when a person comes up with an idea for an invention that has not yet been patented and is discussing this idea with another.
In many cases this would be a potential investor or someone whom they want to work with them on the project, like, for example, a contractor or designer. In this scenario the person with the idea would request the recipient of the information to sign a confidentiality agreement with respect to the information they are being told.
They may also be used in everyday life, such as when you engage and provide your financial affairs to an accountant, or as part of a banking agreement. On the whole, confidentiality agreements are used quite frequently and a fundamental part of everyday life in both the business world and outside.