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What is a Confidentiality Agreement (NDA)?

A Confidentiality Agreement, also known as a Non-disclosure Agreement (NDA), is a contract by which a party receiving information from another party agrees to keep such information confidential.

By signing a Confidentiality Agreement, the party receiving information agrees not to disclose, use or exploit confidential information, except in agreed circumstances or with the consent of the other party.

A Confidentiality Agreement specifies the duration for the confidentiality obligations to apply.


Types of Confidentiality Agreements: 

  • Unilateral Confidentiality AgreementIn this type of agreement, two parties are involved. Out of the two, only one party discloses confidential information and expects the other party to prevent the information from any further disclosure.
  • Bilateral Confidentiality AgreementIn this type of agreement, two parties are involved and both parties disclose confidential information to each other with an intention to protect and secure the information from external parties.
  • Multilateral Confidentiality Agreement: In this type of agreement, three or more parties are involved, out of which, one of the parties discloses a piece of confidential information and the other parties promise to have that information protected from any further disclosures. 


Key Terms

Confidential Information: Refers to any information (regardless of how it is recorded, preserved, or disclosed) that the recipient party (of the information) agrees to commit to not disclosing after the date of the signed Confidentiality Agreement.

Purpose of disclosing confidential information: The purpose of a confidentiality agreement is to protect business information you share with employees from being shared with people outside of the contract for a designated period. For a confidentiality agreement to take effect, your employee must sign it and the employer should explain the purpose of preventing the recipient from using confidential information.

Disclosing Party: The party that concludes the agreement to its advantage not to publish confidential information. This party gives confidential information to the other party called the recipient.

Recipient: The Party to this confidentiality agreement which receives or obtains directly or indirectly confidential information and thus, is obliged to not disclose any confidential information from this Agreement. the receiving Party will be responsible for any breach of this Agreement.

Duration of Confidentiality: It is the period during which the signatory to the agreement commits not to disclose confidential information throughout the duration of the agreement.

Exclusions from Confidential Information: It is a clause in the contract stating cases where the information is not confidential and is not responsible if this information appears to the public.

Waiver: Waiver of the Non-Disclosure Agreement is a clause placed in the agreement stating the way to waive the agreement and it is stipulated when the agreement is established.

Variation: Determines the method of change adopted in the agreement except in writing or other methods.

Return of information: Clause in the confidentiality agreement at the request of the disclosed party in the method of disposal of confidential information.

Termination of the agreement: The two parties agree on how to terminate the agreement except through the agreement of the two parties to terminate it or by a certain period after which the agreement ends.

Representative: Employees, directors, agents, officers, advisers, and other representatives of the Recipient. The Recipient will be responsible for his Representative if they publish any confidential information. 

Permitted Use of the Information: This clause explains the confidential information that can be used and the purpose of its use.

Jurisdiction: The jurisdiction to which the Convention is subject in the event of a conflict and the law applicable in the event of a dispute.

How long does a Confidentiality Agreement last?

A Confidentiality Agreement can last for an indefinite amount of time, or it can also expire when one’s obligations are fulfilled. The length however depends on the nature of the agreement and the seriousness of the subject at hand. At times, the agreements do not last as per the intended duration due to unfavorable circumstances. 

Key Points Included:

  • Purpose of disclosing the confidential information
  • Duration of the confidentiality obligation
  • Confidential Information
  • Recipient
  • Exclusions from Confidential Information
  • Receiving Party
  • Variation
  • Return of information
  • Termination of the agreement
  • Disclosing Party
  • Representative

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