Confidentiality agreements can be used in many places.Maybe you've hired someone to work for you and you worry about the security of your client lists and proprietary processes.You want to ensure that investors don't steal your design or destroy your patent rights if you have a computer program that you need to share with others so you can get necessary funding or distribution.You could use a confidentiality agreement if you don't want the general public to know about it.If someone shares your secret information after signing a confidentiality agreement, you can take them to court to stop them and have them pay for the violation.
Step 1: Standard contract format is used.
Single-spaced paragraphs have a double space between them.Number the paragraphs.Each paragraph is a separate term of the contract.If you have any sub-paragraphs, mark them with a letter as if you were writing an outline.If you follow a main paragraph with sub-paragraphs listing specific examples, you will be able to keep confidential certain types of information.
Step 2: Decide whether the relationship will be mutual or one-way.
There are two types of confidentiality agreements, one with responsibilities for both parties and the other for only one party.When you give information to a company, they need to give you something secret in return.For example, if you have a secret invention, you may want to give it to a professional who can help you develop a marketing plan.You need a one-way confidentiality agreement if you need to share confidential information with an employee or contractor who will not be sharing secrets of their own.If you were seeking investors, you would use a one-way agreement, as long as those investors were only providing financing for your project and not any business advice or strategy.
Step 3: The parties must be identified to the agreement.
Everyone who might have access to the confidential information must be listed.If the agreement is between two companies, the CEO of the company may be able to sign for her entire company, but she should also make sure that all employees who have access to the information are bound by its provisions.If the person signing the agreement has the authority to bind those people, the parties can be identified.Subcontractors should be included as parties to the agreement if the contract forbids a contractor to have a subcontractor assist with the work.
Step 4: What information will not be made public.
Any information that might be exchanged between the parties can be included in the types of information you want to keep confidential.For example, if you're designing a mobile app, you might include not only the code and design of the app itself, but also any prototypes, testing procedures and results, or reviews and comments from alpha or beta testers.The boundaries of confidential information are set in this portion of the agreement.Your agreement may list all client lists as confidential, but you don't have to reveal the content of those lists.
Step 5: Information that is not confidentiality is listed.
Broad categories of information that don't have to be protected as confidential are included in this list.Most of the categories are created by the law.Information that was public knowledge will never be considered confidential.Information that the receiving party learns from a third party cannot be considered confidential for the purposes of a confidentiality agreement.One of the most important exclusions is that if the receiver creates something independently before entering the confidential relationship, it cannot be considered a party to the confidentiality agreement.
Step 6: The duties and obligations of the party receiving the confidential information need to be established.
Confidentiality agreements usually limit the ways in which the receiving party can use the confidential information provided.If you are looking for investor evaluations of something you've invented, your confidentiality agreement may specify that the information can only be used for the purpose of evaluating the product and not in the evaluator's own business.If you're having an employee or contractor sign a confidentiality agreement, you might want to limit their use of information to their job duties.Many confidentiality agreements say that the information should be kept the same way they would keep their own confidential information.If the receiving party has a policy for handling confidential information, this statement will work.Confidentiality standards include limiting access to the information and taking basic precautions to keep it out of the hands of outsiders.The use of encryption for emails discussing confidential information is one example of such precautions.If your confidentiality agreement relates to software designs, inventions or technology, it should include a statement that the receiver of the information has no license, expressed or implied, in the data.The receiver has a duty not to induce others to violate confidentiality according to most state laws.
Step 7: The agreement will be valid and enforceable during the specified time period.
The period during which disclosure will be made and the time period after that should be specified in your agreement.Some confidentiality agreements may only last two or three years in the US.There should be a specific date used as a starting point for the end point.It's not clear when the agreement will take effect and how long it will last.If your agreement specifies a confidentiality period of two years, but fails to establish when that two year period starts, the receiver of the information can argue that she didn't believe the agreement had gone into effect yet.The confidentiality period can start from the day the agreement is signed.If you use this method, make sure you don't reveal any secrets until the agreement is in force.When a certain event happens, the confidentiality time period may end.The confidentiality period may end when you market and distribute a new product.
Step 8: Penalties or legal ramifications can be set for breaching the agreement.
If secret information is revealed to the public, confidentiality agreements can include stiff financial penalties.Some leave the consequences up to a judge.An injunction is a court order to stop someone from sharing information in violation of an agreement.Penalties may be incurred as a result of the breach of confidentiality, which you have the ability to file a lawsuit for.If the breach was intentional, you may be able to get double or triple damages.Depending on the information being disclosed and how damaging it would be if it got out, how detailed you want your penalties to be.A clause listing a specific dollar amount in damages for breach is more likely when it is difficult to value.The issue isn't left up to the discretion of a judge if both parties agree the information is worth this amount.
Step 9: Add any additional provisions.
Sometimes called "boilerplate", all agreements contain various clauses that don't fit in any other section, such as which state's law will apply and whether attorneys' fees will be available to an injured party.
Step 10: All parties should have space to sign the agreement.
The agreement can be considered valid if both parties sign it.