Confidentiality Agreements: Can You Keep a Secret?

March 17, 2022

By Stephen Thompson

Are you being asked more and more to sign up to confidentiality or non-disclosure agreements?  We’ve certainly seen an increase in the numbers of our clients who are being asked to sign up to them.  Here are our top things to look out for before signing on the dotted line:

1. Is it a one-way street?

   Does the agreement just protect the other side, or is your confidential information protected too?  If the agreement is just one-sided, think about either asking for it to be mutual or have your own confidentiality agreement.

2. Does it have a purpose?

   A confidentiality agreement usually provides that the information can only be used for a specific purpose – e.g. to design and produce a product, for example.  Make sure this is clear, otherwise the information could be used for much wider reasons than anticipated.

3. Can you comply with its provisions?

   This sounds obvious, but be clear on what your obligations are and whether you can reasonably comply.  For example, if the agreement provides that you must ensure your employees are subject to a duty of confidentiality, consider what such a provision is already included within their employment contracts or do you need them to sign something separate?

4. What’s your liability?

   Increasingly we are seeing agreements provide for sums to be paid as penalties in the event of breach of the agreement.  We generally advise that such provisions are resisted as far as possible.

5. How long does it last?

   Make sure the agreement is clear as to how long your duty of confidentiality lasts for.  You don’t want to sign up for something open-ended.

If you would like more information about confidentiality agreements or a related matter, get in touch with Stephen Thompson on sthompson@darwingray.com, or call on 029 2082 9136 for a free, no obligation conversation.