A confidentiality agreement is a legally binding contract legally prevents the disclosure of proprietary information. The deal is signed by an individual disclosing the information–known as the “disclosure”–to another individual or business, who must be a specific person (often called the “recipient”) that has been specifically designated to receive the confidential information. This recipient may be an employee or someone representing his or her company, such as a consultant.
In other words, a confidentiality agreement is a written agreement by which the owner of an idea for a new business agrees to protect the other party’s interests. It must be written in such a way that even the most non-attorneys have to understand the meaning. The other party may be a company with its own idea or another company contemplating a merger or a commercial transaction. One company will pay another company not to use that first company’s idea. The person who creates the idea or invention keeps all of the rights.
These agreements typically last for a specified amount of time, and they may often be buried in legal jargon and confusing legalese. Writing a confidentiality agreement with a legal firm specializing in patents and trademarks is a must to avoid the consequences.