Reasons to Use Confidentiality Agreement
In business, you may be familiar with Confidentiality Agreement that will protect the company or business’ secrets from the external parties. The contract has a legally binding power so no one can abuse the relationship and the agreement.
About the Agreement
Also known as NDA (Non-Disclosure Agreement), this Confidentiality Agreement is a legal contract that involves two parties where none of them can profit or share from the confidential information. A business generally has their own secret. That’s why they are handing out the agreement to a contractor or an employee to ensure that secret information or trade secrets will remain private. This agreement has many names, such as a Secrecy Agreement (SA), a Proprietary Information Agreement (PIA), a Confidentiality Clause, a Confidentiality Statement, or simply a Non-Disclosure form.
Reasons to Use It
There are many reasons to use the agreement:
- To set the standard when it comes to handling information. The parties usually agree to treat the confidential information the way they handle and treat their own secret.
- To maintain a competitive advantage. This is meant so that the trade secrets or intellectual property don’t reach the public, the media, or the competitors. This kind of arrangement is pretty common in information technology sector
- To explain the responsibility of each party. The agreement would create a confidential relationship between the parties and to explain what it means. For instance, a confidentiality agreement should help a consultant to use the information from the new client concerning how it should be used.
- To lay the ground for any legal action. The agreement can be used as a proof in a legal case
- To protect the information during a work together or merger. This is usually done in business where the information is protected until the acquisition or merger is finalized.
- To protect the patent rights. An inventor can lose the patent rights when the details about the invention has been publicly disclosed
These are the types of info that is protected by the agreement:
- Secret formulas
- Scientific information
- Trade secrets
- Proprietary software
- Computer technology
- Unpublished patent applications
- Concepts for future practices, services, or products
- Samples and prototypes
- Scientific info
- Engineering systems, drawings, specifications, or drawings for products in development or existing products
Do you need to know the samples or examples for the agreement? No need to worry! You can check our collections of Confidentiality Agreement below or within our library.