A Confidentiality Agreement is a legally binding contract that establishes a confidential relationship between parties. Its primary purpose is to protect sensitive information shared between the parties involved, ensuring that the receiving party does not disclose the information to unauthorized third parties.
The agreement outlines specific terms, including the type of information considered confidential, the obligations of the parties to maintain confidentiality, and the duration of the confidentiality obligation. It may also specify exceptions, such as information already in the public domain or information required to be disclosed by law.
For example, in a business context, a Confidentiality Agreement may be used when a company shares proprietary information, such as trade secrets or client lists, with a potential partner or employee. By signing the agreement, the receiving party agrees not to use or disclose the confidential information for purposes other than those outlined in the agreement, thereby protecting the interests of the disclosing party.