Congratulations! But now what?
If your idea is half as great as you think it could be, how can you talk about it to someone and be sure they are not going to steal it for themselves?
The answer is simple: you need a Confidentiality Agreement.
These agreements are ideal to protect any kind of confidential information, inventions, ideas, sensitive business information, client lists and trade secrets.
They can be used to ensure that employees, contractors or business associates and the like do not reveal any confidential or sensitive information disclosed in the course of their business dealings.
When should I use a Confidentiality Agreement?
- If you are talking to somebody about an idea or information that is not otherwise protected by a patent, design or trademark etc.
- When you are disclosing confidential information to potential employees or consultants in the course of interview negotiations or discussions;
- When you employee new staff or take on new contractors or consultants;
- If you are selling your business and disclosing private information during the course of the negotiations;
- Whenever you are disclosing information to another person that is confidential or sensitive in nature that you want to ensure remains confidential.
What do I need to include in the Agreement?
The agreement needs several clauses and conditions for it to be effective. First, you need to make it clear what the person you talk to can and can’t reveal. The parties need to know that the information discussed is confidential, and that by revealing or using it, they will violate the contract and be open to whatever penalties are applicable.
Can’t I just make a verbal agreement?
Of course. But making a verbal agreement and actually enforcing it are two different stories, they are all too often little more than paper tigers. A written agreement is the best way to protect yourself and your business.
There are various types of Confidentiality Agreements available:-
- Mutual Confidentiality Agreement– ideal for use where both parties will be receiving sensitive or confidential information from the other. Both parties agree not to disclose the confidential information they have received in the course of their negotiations and discussions.
- One Way Confidentiality Agreement This is ideal for use when you are disclosing confidential information to another party which is of a sensitive nature and require the other party to keep the information in confidence. Unlike the mutual agreement, you are not receiving any confidential information from the other party. This may be the case for example, where you are interviewing for job positions or entering discussions with an incoming prospective business partner.
- Confidentiality Agreement for Sale of Business This should be used when releasing information to a potential purchaser of your business which contains sensitive information about your finances and business.
- Employees Confidentiality Agreement This protects confidential information that an employee or contractor may come into contact with during the course of their relationship with you or your business. It protects your client data bases and business interests.