Almost all businesses have some information that they would like kept private. It may as simple as your customer list, as rare as the recipe for Coca Cola or as exotic as some mineral extraction process. You may have a few items, or you may have a vast portfolio of these items. An important method of protecting these assets is a confidentiality agreement or a nondisclosure agreement.
Such an agreement is a contract, typically with your employees or, in the case of some business transactions like a licensing agreement or a merger, with another entity. The form of the confidentiality agreement can vary immensely.Â
It may be a short, one-page document, outlining the duty of a sales representative in your business who has access to your customer lists, and which details what the list can be used for and generally prohibiting disclosure to others.
It may be a very long document, outlining access of a third-party, with whom you are exploring a licensing agreement for one of your products or processes, and which would necessarily entail disclosure of confidential trade secrets to that entity.
Not only should this type of confidentiality agreement contain explicit limits on who is permitted to use the information and limits on its usage. Your attorney can go over the specifics and you should spend sufficient time explaining your goals and concerns, so they can create an agreement that protects your information but permits the transaction to complete successfully and prevent unnecessary business litigation.
Additionally, the agreement should also discuss how the information is handled. If the entity you are dealing with does not have a robust control process in place to ensure the confidentiality of the information, your agreement should “help” them, by providing explicit procedures for handling your information.