Confidentiality agreement template

Confidentiality agreements are integral to safeguarding sensitive information in business dealings. Here's a comprehensive guide about this crucial type of contract, and a free confidentiality agreement template to help you get started.

What is a confidentiality agreement?

A Confidentiality Agreement is a legally binding document that establishes a confidential relationship between parties.

Within the agreement, the parties agree to not disclose any proprietary or sensitive information they learn from each other.

This agreement is often used when a business or individual has a process, idea, or data that they want to share with another party for certain purposes, but wish to restrict broader use or dissemination.

What is the purpose of a confidentiality agreement?

The main purpose of a confidentiality agreement is to protect sensitive information. This could be anything from trade secrets, business strategies, customer lists, or details about new products, to proprietary methodologies.

The agreement ensures that this information remains private and confidential, and cannot be used against the disclosing party or shared without consent. Confidentiality Agreements are commonly used alongside or as part of employment contracts, business partnerships, and other commercial contracts.

Confidentiality agreements vs NDAs: what's the difference?

An NDA (Non-Disclosure Agreement) and a confidentiality agreement both aim to protect the secrecy of certain information, but they are used in different contexts.

The key difference is whose information is being protected by each agreement. An NDA is typically used when only one party's information sharing rights are being governed, making it a unilateral contract.

On the other hand, a confidentiality agreement is used when multiple parties exchange and pledge to keep the shared information confidential, making it a mutual or multilateral agreement.

To find out more about the various nuances of the two types of agreement, check out this detailed comparison of confidentiality agreements vs NDAs.

Who is responsible for managing confidentiality agreements?

The responsibility of managing confidentiality agreements typically falls to the legal department within a business.

However, the duty can also lie with business owners, human resources, or any team involved in sensitive negotiations, mergers, or acquisitions. These responsible parties must ensure that agreements are correctly drafted, signed, stored, and enforced.

What are the elements of a confidentiality agreement template?

A comprehensive confidentiality agreement template should typically contain the following key elements:

• Identification of the parties: This section defines the parties involved in the agreement. It specifies who will be sharing the information (the 'discloser') and who will be receiving the information (the 'recipient').

• Definition of confidential information: This is a key part of the agreement. It should clearly describe what constitutes 'confidential information.' This could include technical data, customer information, business strategies, marketing plans, or proprietary algorithms. Some agreements also define what is not considered confidential, like information already available to the public or previously known by the recipient.

• Obligations of the recipient: This section outlines the responsibilities of the party receiving the confidential information. The obligations typically include: using the information only for the agreed purpose, keeping the information secret, not making copies without permission, and not disclosing the information to unauthorized parties.

• Exclusions from confidential treatment: It's standard to exclude certain types of information from the obligation of confidentiality, for example, information that is already known to the public, independently developed by the recipient, or lawfully received from a third party. An excessive scope when it comes to confidentiality would be unreasonable.

• Duration of the agreement: This specifies the period for which the confidentiality must be maintained. The term varies depending on the nature of the information and the agreement of the parties, but it is typically between one and five years. A longer term would also be unreasonable.

• Consequences of breach: This section outlines the remedies available to the discloser if the recipient breaches the agreement. This often includes the right to seek an injunction (an order to stop the recipient from continuing to breach the agreement), as well as the right to sue for damages.

• Return of materials: At the end of the agreement or relationship, there is often a requirement for the recipient to return any materials provided by the discloser that contain or relate to the confidential information.

• Jurisdiction or governing law: This determines the laws of which state or country will be used to interpret the agreement and manage any disputes that might arise.

Including these elements of the contract in a confidentiality agreement will make sure you have a comprehensive and robust legal document that protects the discloser's sensitive information, while at the same time providing clear instructions and expectations for the recipient.

What is the traditional workflow for managing confidentiality agreements?

The traditional workflow for managing confidentiality agreements often starts with the legal team drafting the agreement, following the needs and context of the specific business interaction.

Given how often confidentiality agreements are used by businesses, it can quickly leave legal teams buried in low-value contract admin work.

Once drafted in an editor like Word, the contract is then forwarded to the commercial team (usually via email) to share with the counterparty. They then review it and add any revisions, often by redlining the contract in Word. The revised version of the confidentiality agreement is then returned via email.

When the parties have reached agreement on the terms, they'll usually move the confidentiality agreement into a separate electronic signature tool for it to be signed. Popular tools include DocuSign or HelloSign, but there are plenty of great DocuSign alternatives on the market.

Once signed, the confidentiality agreements are either printed and stored in filing cabinets or uploaded to shared drives like Dropbox, OneDrive or Google Drive.

The second approach is certainly better, but it still doesn't make it easy to search through or find confidentiality agreements in the sea of other contracts.

This process is manual and time-consuming, meaning confidentiality agreements quickly become a burden for legal teams with higher-value projects to balance.

Fortunately, businesses can transform the process automating confidentiality agreements in Juro.

How to automate your confidentiality agreement template in Juro

Businesses that use Juro's flexible contract management software can generate confidentiality agreements in seconds and at scale. This is achieved with the following features.

1. Automated contract templates‍

Instead of drafting a confidentiality agreement from scratch every time you need one, you can use Juro's automated contract templates.

These confidentiality agreement templates can be populated in seconds, either through a simple Q&A form or via an integration with other software your business uses.

This helps to save valuable time and resources and also ensures consistency across all your agreements.

2. Browser-based negotiation‍

Juro enables you to negotiate terms directly from your browser. There's no need for endless email threads or tracking changes across multiple document versions.

All parties can collaborate within the same document in real-time, keeping negotiations clear and efficient.

3. Native eSignature‍

The platform also provides native eSignature capabilities. This eliminates the need for printing, scanning, or mailing documents for signatures.

Parties can add legally binding signatures to the confidentiality agreement digitally, from anywhere in the world, further speeding up the process.

4. Data-rich contract storage‍

Once your confidentiality agreements are signed, Juro securely stores them in a data-rich contract repository.

This means you can access valuable data from your agreements at any time, which can be useful for tracking obligations, understanding relationships, and driving strategic decisions.

5. OCR-enabled search functionality‍

Juro's search functionality goes beyond just looking for document titles.

With OCR (Optical Character Recognition), you can search the contents of your confidentiality agreements to quickly find specific clauses, terms, or parties. This can be a huge time-saver when managing contracts at scale.

Juro streamlines the entire contract workflow, allowing businesses to safely automate up to 75 per cent of contract admin and agree contracts up to ten times faster.

If creating and managing confidentiality agreements is becoming painful for your business, Juro is a great solution. Find out more by hitting the button below.