I’ll show you mine…: Confidentiality Agreements

Posted: February 07, 2010 | Last Updated: February 06, 2016

Posted: February 7, 2010

Written by: Adam Herstein

The contestants on American Idol apparently sign them.  

So do the participants in the opening ceremonies for the 2010 Winter Olympics. 

A confidentiality agreement (CA) or non-disclosure agreement is an agreement by which one or more parties disclose confidential information (CI) to one or more parties, and perhaps vice versa.  They are often signed at the beginning of commercial relationships, so people want to sign the thing and get going. 

Before you reach for your fancy pen, read the CA and ask yourself these questions:

  1. Who is disclosing CI and who is receiving CI?  If one party is disclosing to another, it should say this.  If both parties are both disclosing and receiving, it should say this.
  2. How does the CA define CI?  What is CI?  What isn’t CI?  If one party makes notes about the other party’s CI, does that become part of what the agreement defines as CI, or not? 
  3. What use can be made of the CI?  Perhaps the CA should also address what the CI cannot be used for?
  4. How long do the obligations under the CA last?  If the CA says that the obligations under the CA last two years, the parties have to consider what might happen in two years such that the CI doesn’t need the protections in the CA.  If the answer is ‘nothing’, perhaps there shouldn’t be such a time limit.
  5. Can either party get out of the CA?  If there is a way out, does CI have to be returned and/or destroyed?  Make sure the agreement is clear, especially if it’s your CI at stake.
  6. Is there more going on here?  Sometimes the parties may be creating things or new CI.  Ownership of such things or new CI should be addressed now–in this CA or in a separate agreement. 

The above questions are not exhaustive.  Each CA is situation specific and must be judged on its merits. 

Happy Sharing!