Friday, February 22, 2008

The Role of Confidential Agreements in a Modern World

Have you been made to sign an agreement not to disclose specific information? Can lawsuit ensue for breach of such agreement?

A Confidentiality Agreement is a legal contract between two or more parties which provides and outlines restricted information or knowledge which cannot be disclosed to others.

  • Protecting your classified information or inventions exposed during discussions, proposals or negotiations
  • Employers engaging services of employees and independent contractors without the requirement of an employment contract
  • Trade secrets
  • Any purpose described therein
Normally, it is entered into between two companies or individuals doing business together. They can either be mutual meaning both parties are restricted from use of materials provided or they can only restrict a single party.
Breach of this agreement entitles the other party to sue for damages and seek an injunction against further disclosure.
From my own point of view, non-disclosure agreement has become a necessity in this modern and competitive world. It is considered one of the protective measures to battle formula or policy leakage from the market or community.
Without this, we could easily get an access to a restaurant’s way of cooking its food or a company’s manner of marketing its product or an inventor’s approach of creating things. The world will be in chaos if nothing could be done to deter technical or commercial information from being exposed.
Indeed, classified information must remain confidential to ensure healthy and fair business competition and variety in providing services. This will make people find ways to improve their products or services and challenge them to do more.