11+ Mutual Confidentiality Agreement Examples – PDF, Word

In every company, there are really some information and properties that need to be kept confidential. Proprietary information, production methods, secret recipes, details of a certain transaction, and product information are just few of the confidential information that must remain classified. You may also see employee confidentiality agreement examples.

The people handling such information must swear that they will not disclose such private information to outside parties. To make their promise legal and binding in a court, they must have a confidentiality agreement.

Mutual Confidentiality Agreement Example

mutual confidentiality agreement example

Restaurant Mutual Confidentiality Agreement Example

restaurant mutual confidentiality agreement example

Brief Mutual Confidentiality Agreement Example

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Confidentiality Agreement Defined

In doing business, there are a lot of instances when you must keep an information confidential and must not disclose it to other parties. To do it safely and to make sure that the other party involved in the confidential information would respect the classified information and not use it to your detriment, a simple confidentiality agreement must be signed by the parties.

Also known as non-disclosure agreement (NDA), confidential disclosure agreement (CDA), proprietary information agreement (PIA), or secrecy agreement (SA), a confidentiality agreement is a legal contract between two parties that details the confidential information that a certain party wishes to share with another party for certain purposes but wishes to have restricted access to or by third parties or parties not involved in the transaction or agreement.

In this contract, the parties must agree to keep the information covered in the general agreement confidential and not to disclose them. It creates a confidential relationship between the parties to protect proprietary information or trade secrets. Note that this contract cannot be enforced if the contracted activities are felonies or a crime or any illegal act punishable by law.

General Types of Confidentiality Agreement

A confidentiality agreement can be classified in three general types: unilateral confidentiality agreement, bilateral confidential agreement, and multilateral confidentiality agreement. These types are briefly described below.

1. Unilateral

Sometimes referred to as one-way confidentiality agreement, a unilateral confidentiality agreement involves two parties but only one party, the disclosing party, anticipates disclosing certain information to the other party, the receiving party, and requires that the confidential information be kept classified and protected from further disclosure for some reason. The common reasons for using standard confidentiality agreement are presented in the next section.

2. Bilateral

Sometimes referred to as mutual confidentiality agreement or two-way confidentiality agreement, a bilateral confidentiality agreement involves two parties where both parties anticipate disclosing classified information to one another that each intends to protect from further disclosure. This is common when businesses are considering to undergo a joint venture, consolidation, or merger. You may also see non-disclosure confidentiality agreement examples.

Both parties must disclose each of their business to one another, but they must make sure to keep them and that no outside parties must know any information regarding their businesses.

3. Multilateral

This confidentiality agreement involves three or more parties where at least one of the parties anticipates disclosing information to the other parties involved in the transaction with the classified information and requires that the information be kept confidential and protected from further disclosure. This confidentiality agreement eliminates the need for separate unilateral or bilateral confidentiality agreement. You may also like staff confidentiality agreement examples.

This type of confidentiality agreement is helpful since you do not need to have a separate agreement if you are transacting to three parties. Instead, you just need a single agreement to be used for all the parties that you are contracting with.

Comprehensive Mutual Confidentiality Example

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Detailed Mutual Confidentiality Agreement Example

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European IPR Helpdesk Mutual Confidentiality Agreement Example

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Key Elements of Confidentiality Agreement

A proper and formal confidentiality agreement need not be long and complicated for it to be binding. A simple, brief, concise, and direct to the point confidentiality agreement is what it takes to have an easily readable and understandable confidentiality agreement. You may also see HIPAA confidentiality agreement examples.

However, when you create a confidentiality agreement, you must make sure that you include all those important and necessary information in your simple agreement. These are the key elements in your confidentiality agreement. They are as follows: identification of parties, definition of confidential, scope of confidentiality, exclusions from confidential treatment, and lastly, term of the agreement.

1. Identification of Parties

At the beginning of the general contract, you must set forth the parties who are involved in the contract. If it is a unilateral confidentiality agreement where only one party is providing a classified information, the recipient of the information can be referred to as the recipient while the party disclosing the classified information is the disclosing party.

If the company intends to show the confidential information to a related or affiliated company, to a partner, or to an agent, you must also consider covering those third parties in your confidentiality agreement.

2. Definition of Confidential

In this section of your confidentiality agreement, you must clearly define what confidential information means. You must specify what information is confidential, such as those that are marked in writing as “confidential” as well as  those that are conveyed orally. If you cannot clearly specify the confidential information or you just wanted to prevent loopholes in your commercial agreement, you can make the confidentiality agreement as broad as possible.

However, if you are a recipient of the information, you must make sure that the classified information that you must keep is clearly identified so you will know the information that can and cannot be disclosed in public.

For information that are conveyed orally, this might be tricky to deal with. Other recipients may insist that the information conveyed in writing are the only ones that are confidential; hence, you must make sure that you clearly include in your basic agreement that the information conveyed orally can also be included as a classified information and not just those that are in writing.

3. Scope of the Confidentiality

The receiver of the confidential information has the obligation to keep the classified information in fact classified and not use the confidential information itself.

In the first part, the recipient must keep the secret information secret. This means that the recipient has to take careful steps to not let others know or have access to the classified information. In the second part, the recipients must not use the information themselves. The recipient must not own the information, especially those that entails rights, for their own benefit. You may also check out teacher confidentiality agreement examples.

If the recipient breached the contract, the issue can be escalated in the court and they can be sued for damages.

4. Exclusions from Confidential Treatment

There are certain exclusion from the obligation of the recipients to make the formal agreement fair and not too burdensome for the receiving party. Here are the common exclusion from the confidential treatment.

  • Information that are already known to the recipient
  • Information that are already publicly known
  • Information that are disclosed to the recipient by some other party who has no duty of the confidentiality to the disclosing party
  • Information that are independently developed by the recipient without reference to the confidential information of the disclosing party

5. Term of the Agreement

The term of the agreement refers to the length of time that the agreement must take in effect. You must specify in your confidentiality agreement the length of time that your confidentiality agreement will last. While many attorneys would say that confidentiality agreements must last forever, some would argue that most of the information in the confidentiality agreement would become useless at some point in time. You may also see patient confidentiality agreement examples.

In determining term of your agreement, you must choose what is reasonable, and this depends of the industry you are in as well as the type of confidential information that you conveyed. In a lot of business entities, a few years is acceptable because the technology changes so fast, rendering the information worthless in a short period of time. You may also like mutual confidentiality agreement examples.

Fillable Mutual Confidentiality Agreement Example

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Formal Mutual Confidentiality Agreement Example

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Reasons to Consider Using a Confidentiality Agreement

Why would people consider using a confidentiality agreement? Here are the common reasons why different people use a confidentiality agreement.

1. Protecting intangible asset rights.

Intangible assets are those assets that lack physical substance but are important for the entity which includes patents, copyrights, goodwill, and trademarks. These assets must be protected by the entity owning them or their inventors because the inventor will lose his or her rights to the intangible asset when an invention’s details are already disclosed in public. You may also see HIPAA confidentiality agreement examples.

2. Setting standards for handling classified information.

Usually, the parties involved in the confidentiality agreement agree to treat each other’s confidential information the way they treat their own. But, this only works if the recipient has standards for dealing with classified information; for example, limiting access to information and limited access in using other methods, like password-protected files, to preserve confidentiality of information. You may also like real estate confidentiality agreement examples.

3. Explaining the responsibilities to the parties involved.

Included in a confidentiality agreement are the responsibilities of the parties involved and an explanation of the responsibilities. It must clarify certain information to avoid misunderstanding and confusion among the parties. It must also detail the main topics discussed in the basic confidentiality agreement, providing a comprehensive agreement to both parties.

4. Maintaining a competitive advantage.

Confidentiality agreements are primarily created to make sure that the classified information (examples are presented below) do not reach the public, especially the competitors. Hence, confidentiality agreements are commonly used in rapidly changing industries including information technology. You might be interested in computer confidentiality agreement examples.

5. Protecting information during mergers.

In a merger or consolidation, a confidentiality agreement protects the information about the business and the purchase agreement until a merger or consolidation or acquisition is finalized. Furthermore, in joint company ventures, a confidentiality agreement is useful for protecting business interests.

6. Laying the groundwork for legal action.

Since confidentiality agreements are legal documents, they are valid and binding, hence can be used as evidence during legal cases in court.

Hospital Mutual Confidentiality Agreement Example

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Intellicorp Mutual Confidentiality Agreement Example

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Information Protected by a Confidentiality Agreement

When a certain information is not meant to be published in public, a confidentiality agreement must bind the parties involved in handling the classified information. So, what information are protected by a confidentiality agreement? Below are some common examples of information that must be kept confidential within an entity:

1. Intellectual property

  • Recipes
  • Secret formulas
  • Copyrights
  • Prototypes and samples
  • Computer technology
  • Scientific information
  • Concepts for future products or services
  • Unpublished patent applications
  • Engineering drawings, designs, systems, or specifications for products in development

2. Manufacturing processes

3. Production methods

4. Sales plans

5. Marketing materials

  • Marketing campaigns
  • Marketing projects

6. Clients and sales information contacts

  • List of clients
  • Client contracts
  • Sales contracts
  • Business relationships

7. Operational procedures and strategies

8. Business communications

9. Product or service information

  • Product development procedures
  • Product packaging
  • Equipment
  • Tools
  • Production techniques

10. Test data and test results from employer

11. Financial information

  • Transaction details
  • Internal cost information
  • Accounting procedures
  • Accounting reports
  • Software used
  • Payroll data

You may also see license agreement examples.

Pharmacy Mutual Confidentiality Agreement Example

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Simple Mutual Confidentiality Agreement Example

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Final Note

There are a lot of information that must be kept confidential within an entity and must not be disclosed to other parties especially to the competitors and others who are not primarily involved in the confidential information. Those people who are directly working with the said information must sign a confidentiality agreement, swearing to keep the information confidential. You may also see non-compete agreement examples.

Confidentiality agreement comes in three general types, namely unilateral, bilateral, and multilateral. It contains key elements such as the identification of parties, definition of confidential, scope of the confidentiality, exclusions from confidential treatment, and term of the standard agreement.

Knowing these things can help you a lot especially when you are still new in creating a confidentiality agreement. Lastly, do not forget to refer to the above examples of mutual confidentiality agreement.

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