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  • Sample Plans

Writing a Business Plan Confidentiality Statement

Business Startup Checklist

Free Confidentiality Statement Template (NDA)

Ayush Jalan

  • December 12, 2023

Confidentiality Statement for Business Plan

Every company has a unique identity that sets it apart from its rival companies in the industry.  It is a combination of various aspects: The way you set your goals , your marketing strategy, your manufacturing process, or your entire business plan.

As crucial as it is to create a business plan that helps you stand out, it is perhaps just as crucial to protect your plan from any potential intellectual property theft. This is where a confidentiality statement for your business plan helps you safeguard your valuable assets.

A business plan confidentiality statement is a document that states that the information disclosed to the recipient can’t be disclosed to anyone outside the agreement. It is an agreement made between two parties before they enter a deal or exchange any sensitive information which is confidential.

Why Do You Need a Confidentiality Statement?

Even though trust is essential between partners or investors, there’s always a need to stay cautious while handing over your business plans. Even though the organization you plan to work with values confidentiality, everyone involved in it may not.

Your business plan is one of the most elaborate and classified documents. Before disclosing any information, the first and foremost thing is to sign a confidentiality statement. This will avoid the misuse of any information disclosed between the two parties.

How Does a Confidentiality Statement Protect You?

When a confidentiality statement is signed, it is agreed by both parties that they will not expose any of the information that is discussed or presented in the business plans. Additionally, the document should also mention the penalties in case of a violation of the agreement.

If the other party violates the statement of confidentiality, you can proceed legally and receive compensation for the damages you had to bear because of the violation. As per the contract, the compensation is paid.

The absence of a confidentiality statement is an invitation for others to use parts of your business plan. Although copyright laws can help you claim most of your information, some, still, stay unprotected.

Creating a Confidentiality Statement for the Business Plan

confidentiality statement of a business plan

Most companies include a brief confidential statement on their business plan cover page. Although it is not a requirement, it delivers a quick message that the document is highly classified. Furthermore, it is essential to create an exclusive document.

To write a stringent confidentiality statement for your business plan, these are the elements that you must include:

1. Date of Effect

The date of effect is the date from which the confidentiality statement becomes active. An agreement is not valid until all the parties sign it; the date of effect follows this.

2. Parties Involved in the Agreement

It is crucial to specify the parties that will sign the agreement. If someone, you want as a part of the confidentiality statement, hasn’t signed it, they’re not bound by the clauses mentioned in the document.

For instance, two companies are getting into a contract, and the CEOs, representing the entire company, are signing the document, it is essential to mention that all employees are also bound by the agreement even when they haven’t signed it.

3. Agreement Terms

Describe and mention all the terms that both parties are agreeing to. This is a crucial part of the agreement and hence, requires confidentiality. Anything that isn’t included is not protected.

Here, you can also include that the recipient needs written consent from the disclosing party—the owner of the information, in case any information needs to be disclosed to a third party who isn’t a part of the statement of confidentiality.

4. The Non-Confidential part

Along with mentioning the confidential part of your business plan, you also mention the non-confidential part of the agreement. In most cases, there’s a lot of information that is acquired from other sources. This information won’t show under confidential.

Information relevant to the receiving party won’t list under confidential, some of these are:

  • The information they owned before the agreement
  • If they legally received it from another source
  • The information they need to disclose in a lawsuit or administrative proceeding
  • If they have developed or are developing the information.

5. Consequences in case of Agreement’s breach

Here, you mention all the legal consequences that will follow if the receiving party violates the agreement. This can include the procedure and the monetary penalties. According to the uniqueness of the information exposed, the compensation can vary.

6. Limits of the Usage of Information

The objective of a statement of confidentiality is to restrict the usage of the information that is disclosed to the recipient. Here, you mention the extent to which the information can be used. Also, specify the standard of security that needs to be followed while handling confidential information.

7. Date of Termination

Every agreement has an expiry date, after which both parties are free of the binding clauses. This termination date is set based on various factors like the end of the partnership , the end of a project or an event, or simply the end of the period mentioned in the agreement.

8. Miscellaneous Clauses

This part of the agreement is usually at the end of the document, which includes any other clauses that don’t necessarily fit into the above categories, but the owner of the information wants to include.

9. Signatures of all Parties

Clearly, this is the most important part of an agreement. Without the signatures of all the parties, the document is pointless and of no value. The agreement, as mentioned previously, can’t go into effect unless everyone involved signs it.

We have written a confidentiality statement example for you, including the above-mentioned elements. This will help you get a better understanding of how to write a confidentiality statement for your business plan.

Business Plan Confidentiality Statement Example (Key Points)

This BUSINESS PLAN NON-DISCLOSURE AGREEMENT (hereinafter known as the “Agreement”) between ______ (hereinafter known as the “Company”) and ________ (hereinafter known as the “Recipient”) becomes effective as of this ____ day of ____, 20___ (hereinafter known as the “Effective Date”).

Article III: Term

– The Recipient’s obligations of non-use and non-disclosure concerning Confidential Information will remain in effect in perpetuity. – The Recipient’s obligations of non-use and non-disclosure concerning Confidential Information will remain in effect for ____ years from the Effective Date.

Article VIII: Governing Law

This Agreement shall be governed by the laws of the State of ____________, without regard to conflict of law principles.

Article XII: Notices

Company’s Address ______________________________

Recipient’s Address ______________________________

Representative Signature: Date: Representative Printed Name: Representative Title:

Recipient Signature: Date: Recipient Printed Name:

Protect Your Information with a Confidentiality Statement

As a business owner, it is a duty to protect your ideas and marketing strategies . Create a confidentiality statement for your business plan and ensure that your business interests are safe and in good hands.

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About the Author

statement of confidentiality business plan

Ayush is a writer with an academic background in business and marketing. Being a tech-enthusiast, he likes to keep a sharp eye on the latest tech gadgets and innovations. When he's not working, you can find him writing poetry, gaming, playing the ukulele, catching up with friends, and indulging in creative philosophies.

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Business Plan Confidentiality Statement

A business plan serves as a comprehensive roadmap that outlines the strategic vision, objectives, and operational framework of a business venture. It encompasses critical details such as market analysis, financial projections, marketing strategies, and operational procedures, providing a comprehensive overview of the business’s objectives and trajectory. In the process of developing a business plan , entrepreneurs often encounter the necessity of safeguarding sensitive and proprietary information, prompting the inclusion of a confidentiality statement within the document. A business plan confidentiality statement is a vital component that underscores the commitment to protecting confidential information and proprietary data, ensuring that the business’s competitive edge and strategic insights remain secure and safeguarded from unauthorized disclosure or misuse.

Purpose and Scope of the Confidentiality Statement

The primary purpose of a business plan confidentiality statement is to establish a legally binding agreement between the business and the intended readers or recipients of the business plan. This agreement emphasizes the confidential nature of the information contained within the business plan and serves as a formal acknowledgment of the recipient’s responsibility to maintain the confidentiality of the proprietary data and insights shared by the business. By clearly defining the scope and parameters of confidentiality, the statement reinforces the business’s commitment to protecting its intellectual property, trade secrets, and strategic business insights from unauthorized access, distribution, or exploitation.

Key Components of a Business Plan Confidentiality Statement

A robust business plan confidentiality statement typically includes the following key components:

  • Definition of Confidential Information: Clearly defining the scope of confidential information that is encompassed within the business plan, including proprietary data, financial projections, marketing strategies, operational procedures, and any other sensitive business insights that are not intended for public disclosure.
  • Non-Disclosure Commitment: Outlining the recipient’s obligation to maintain strict confidentiality and refrain from disclosing, reproducing, or distributing the confidential information contained within the business plan to any external parties without the prior written consent of the business.
  • Limitations on Use: Stipulating the permissible uses of the confidential information solely for the purpose of evaluating the business proposal and facilitating potential business collaborations or investment opportunities, emphasizing the restriction on using the information for personal gain or competitive advantage.
  • Duration of Confidentiality: Specifying the duration of the confidentiality agreement, including the timeframe during which the recipient is obligated to maintain the confidentiality of the information, as well as any provisions for the perpetual protection of certain proprietary information beyond the termination of the business relationship.
  • Legal Recourse and Remedies: Enumerating the legal remedies and consequences associated with the breach of confidentiality, including potential legal action, financial penalties, and the imposition of injunctive relief to mitigate the unauthorized dissemination or misuse of the confidential information.
  • Binding Nature of the Agreement: Expressing the mutual agreement and understanding between the parties involved, highlighting the binding nature of the confidentiality agreement, and underscoring the significance of adhering to ethical business practices and professional integrity throughout the business engagement.

Ensuring Comprehensive Protection of Intellectual Property

By incorporating a well-crafted confidentiality statement within the business plan, entrepreneurs can proactively safeguard their intellectual property, trade secrets, and proprietary business insights, fostering a secure and trustworthy environment for sharing confidential information with potential investors, business partners, or stakeholders. The inclusion of a confidentiality statement not only fortifies the legal protection of sensitive data but also reinforces the business’s commitment to transparency, integrity, and ethical business conduct, fostering a culture of mutual trust and respect within the realm of business collaborations and strategic partnerships.

Examples of Confidentiality Statements For Business Plans

Here are a few examples of business plan confidentiality statements that you can use as references or templates for drafting your own business plan confidentiality agreement:

Simple Business Plan Confidentiality Statement:

“This business plan and the information contained herein are confidential and proprietary to [Company Name]. The recipient acknowledges that the information provided in this document is solely for the purpose of evaluating potential business collaborations or investment opportunities and agrees to maintain strict confidentiality. The recipient further agrees not to disclose, reproduce, or distribute any part of this business plan without the prior written consent of [Company Name]. Any unauthorized use or disclosure of this information may result in legal action and other appropriate remedies.”

Comprehensive Business Plan Confidentiality Statement:

“The contents of this business plan, including all financial, operational, and marketing data, are the sole and exclusive property of [Company Name]. The recipient acknowledges that the information provided in this document is strictly confidential and is disclosed solely for the purpose of evaluating potential business opportunities. The recipient agrees to exercise the utmost discretion in safeguarding the confidentiality of this information and to refrain from disclosing, reproducing, or disseminating any part of this business plan to any third party without the express written consent of [Company Name]. Any unauthorized use, disclosure, or distribution of this information may result in legal action, financial penalties, and injunctive relief to protect the proprietary interests of [Company Name]. This confidentiality agreement remains valid for a period of [specify duration] following the termination of any business relationship or engagement.”

Confidentiality Statement for Business Plan Presentation:

“This presentation contains confidential and proprietary information belonging to [Company Name] and is intended solely for the use of the intended recipients. The recipient acknowledges that the information provided in this presentation is of a sensitive and confidential nature and agrees to maintain the strictest confidence in safeguarding the proprietary data and insights shared herein. The recipient further agrees not to disclose, reproduce, or distribute any part of this presentation without the express written consent of [Company Name]. This confidentiality obligation extends to all discussions, materials, and information shared during or following the presentation. Violation of this confidentiality agreement may result in legal action and other appropriate remedies to protect the intellectual property and business interests of [Company Name].”

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How to Write a Business Plan Confidentiality Agreement

Are you about pitching your idea to investors? If YES, here is a detailed guide on how to write an ironclad confidentiality agreement for a business plan. Confidentiality statements are documents that are prepared for the safety of parties that are about to go into a business contract.

Also known as non-disclosure agreements, confidentiality statements help to preserve sensitive information that various business parties might bring to the table when transacting business. Business confidentiality statement in essence is a document that states that when a company’s business plan has been revealed, they will not be able to discuss the contents of it with anyone that is not part of the agreement.

Confidentiality or nondisclosure agreement has various uses in the world of business. An individual with a patentable invention or idea may need to enter into partnership with a manufacturer or marketing firm; and of course, he would want to keep his or her invention a secret.

Again, two companies considering a joint venture may need to share the names of their investors – but may not want those names to reach competitors’ ears. Confidentiality agreements can cover all these scenarios; the parties can tailor them to their specific needs before a meeting or negotiation, or over the course of a contractual relationship.

Tips to Note When Writing a Business Plan Confidentiality Statement

A. use the proper contract format.

The proper contract format that is generally used when writing a confidentiality statement is the standard contract format. In this writing format, single-spaced paragraphs with a double space between them is used. Each paragraph constitutes a separate term of the contract and are also numbered for specification. If you have any sub-paragraphs, indent them under the main paragraph and mark them with a letter, as though you were writing an outline.

B. Agreement type

There are two types of agreement to use when writing your confidentiality statement. A unilateral and mutual confidentiality agreement. A unilateral confidentiality agreement is used when only one party is disclosing information, while a mutual agreement is used when both or all parties involved are disclosing information.

You have to decide whether the confidential relationship established will be mutual or one-way. Mutual confidentiality agreements are necessary when you’re providing information to a company so they can provide you with something secret in return. For example, you may be disclosing your plans for a secret invention to a professional who will help you devise 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, simply doing work for you. There are also other scenarios where you may require either type of agreement, that is why you have to note the type of confidentiality agreement you need.

How to Write an Ironclad Business Plan Confidentiality Agreement

Provide a list of parties involved in the agreement.

When writing a confidential agreement, you must identify who are the parties to be covered by the agreement. If someone is to be involved in the agreement, but he or she is not listed, you must know that the agreement is not binding on them.

For example, if the agreement is between two companies, the CEO of the company may be able to sign for her entire company, but the agreement should also specify that all employees of the company who have access to the information are bound by its provisions.

Parties can be identified by referring to classes of people, such as “employees” or “engineers,” as long as the person signing the agreement has the authority to bind those people.

Unless the agreement forbids a contractor to have a subcontractor assist with the work, all subcontractors should be included as parties to the agreement as well. This is done so as not to leave any loopholes behind that people can take advantage of.

Describe what the other party is agreeing to

In this part, you need to make known the types of information you wish to keep confidential. This can include any sort of information that might be exchanged between the parties. For instance, if you are designing a software, 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 designers.

This portion of the agreement is designed to set the boundaries of confidential information without disclosing the information itself. It can also be stated that information cannot be disclosed without written consent of the Disclosing Party. The information should only be used for business purposes, and only on a “need to know” basis. And that the information can only be disclosed when the receiving party signs a non disclosure agreement.

List information excluded from confidentiality

Of course not all information should be hidden in a business arrangement. So, for this reason, you need to specify the information that are not under confidentiality. These information may not be a list of specific things, but broad categories of information that don’t have to be protected as confidential. Most of these categories are created by law.

For instance, if an information is already public knowledge then it is not be put under the category of protection. Likewise, information that the receiving party learns from a third party or of which they had prior knowledge cannot be considered confidential, and should be listed as non confidential.

One of the most important exclusions is that if the receiver creates something independently before entering the confidential relationship, it cannot be considered party of the confidentiality agreement even if it happens to use or include some of the same or similar secret information or processes.

Other things that are not under the confidentiality agreement include;

  • An information the Receiving Party owned before the agreement
  • If the Receiving Party legally received it from another source
  • If the Receiving Party is required to disclose in a lawsuit or administrative proceeding
  • If it is being or has been developed by the Receiving Party’s employees, consultants, or agents.

Describe what happens if the other party breaches the contract

Wherever there is a law, there must be consequences for breaking it. A typical remedy for this type of contract is an injunction. You can ask for a court order to stop the person who breached confidentiality from continuing to share the information in violation of the agreement.

In some federal cases, under the DTSA, a court may grant the owner the right to seize the property which may be used in “extraordinary circumstances.” You may also require the return of Confidential Information.

You also have the ability to sue for damages incurred as a result of the breach of confidentiality, which may include penalties. For example, in some states you may have the ability to get double or triple damages if the breach was intentional rather than accidental.

Some confidentiality agreements include stiff financial penalties if secret information is revealed to the general public. Others leave the consequences up to a judge or arbitrator to decide. How detailed you want to get with penalties generally relates to how unique the information being disclosed is, and how damaging it would be if it got out.

Establish the obligations of the party receiving the information

Confidentiality agreements typically limit the ways the receiving party can use the confidential information provided, as well as provide the standard for keeping and protecting confidential information.

For example, if you’re looking for investor evaluations of something you’ve invented, your confidentiality agreement may specify that the information can only be used for the purposes 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 would probably want to limit your employee’s use of information to the performance of job duties directly related to the employment.

Many confidentiality agreements recite that receivers must keep the information disclosed to them in the same way they would keep their own confidential information. However, this statement only works if the receiving party has a known policy for handling confidential information.

Generally, confidentiality standards include limiting access to the information and taking basic precautions to keep the information secure so it doesn’t easily fall into outside hands. Such precautions might include, for example, using encryption for emails discussing the confidential information.

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 information by virtue of its disclosure.

State when the agreement ends

Whatever has a beginning must have an end, and same applies to a confidentiality agreement. In writing one, you have to specify when the agreement is going to elapse, and when the parties can get out of the loop. State when the agreement ends and what notice must be given to the other party about the termination. You can set one of two options for when the agreement ends:

Your agreement should specify two time periods: the period during which disclosure will be made, and the time period thereafter during which the information should be kept confidential.

American confidentiality agreements typically last for a period of five years, although some may only last two or three years. The end point doesn’t have to be a specific date, but there should be a specific date used as a starting point. Otherwise it’s unclear when the agreement will take effect and for how long it will be enforceable.

If your agreement specifies a confidentiality period of two years, for example, 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.

Another way to set a specific starting date is to have the confidentiality period start from the date the agreement is signed. If you use this method, make sure you don’t disclose any secrets until you have the signature and the agreement is in force.

The confidentiality time period also may end when a certain event happens. For example, if you’re seeking evaluation of a new product, the confidentiality period may end when you market and distribute that product in stores.

Add any necessary miscellaneous provisions

This section is typically located towards the end. The miscellaneous section is 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 if they agreement is breached. These agreements are then put under the miscellaneous section. This section, though negligent, but should not be overlooked because of the details it is wont to contain.

Provide space for all parties to sign the agreement

For your confidentiality agreement to be binding, it has to be signed. For this reason, you have to provide a page where parties involved in the agreement would pen down their signatures. Without the agreement signed, it cannot go into effect.

With the use of a confidentiality statement, otherwise known as a non-disclosure agreement, the parties can keep nonpublic information under wraps. These contracts bind the parties to very specific pledges on the disclosure of information and are enforceable under the laws of the state where they are created.

More on Business Plan Tips

Business Confidentiality Statement

Its a tool that businesses use when they discuss their business plan with others who will be given information that the company wishes to keep a secret. 3 min read updated on February 01, 2023

A business confidentiality statement is a tool that businesses use when they discuss their business plan with others who will be given information that the company values or wishes to keep a secret. In essence, it is a document that states that when a company's business plan is seen, they will not be able to discuss the contents of it with anyone outside of the agreement.

Confidentiality statements may also be referred to as non-disclosure statements that sales representative and other employees often sign but are typically used in regards to exposure to a company's business plan. They are intended to provide protection for both parties involved in a business plan or transaction.

How Can a Confidentiality Statement Protect You?

In every confidentiality agreement, there should be a provision that states that both parties will not disclose any of the information they are about to discuss or see in a business plan. In addition to that, there should also be a provision that covers damages which will occur in the event that a party breaches the agreement. This is often a place to list the monetary liability the party may be sued for.

If you do not have a confidentiality agreement in place when you write your business plan, then you are opening the door for anyone who sees your business plan to use parts of it without your permission. While copyright law may protect a large amount of it, not all of it will be protected.

If you do have a confidentiality agreement in place and someone does breach it , you will be entitled to some form of compensation and be able to possibly obtain a judgment from the breaching party. If you do not have an agreement in place, the courts are not likely to give you any damages if someone were to steal your idea.

When Do You Need a Confidentiality Agreement?

It is good practice to have a confidentiality agreement anytime that you make a business plan. Some of the benefits of having a confidentiality agreement include:

  • You can make sure that your financial information stays private.
  • You can protect your ides even though the plan may need to be seen by multiple parties.

You should request a signed confidentiality agreement when showing your business plan to anyone, even to a bank. Even though they work for an organization that values confidentiality, it does not mean that everyone working there will be ethical. Always make sure the agreement is signed before handing the business plan over.

Confidentiality Statement Business Plan

The downside of requiring a confidentiality agreement for your business is that it may turn off investors as it can signal distrust. They may feel that you think they plan on stealing your idea and may not be comfortable providing funds for the investment. Other reasons that you may choose not to use a confidentiality agreement include:

  • It can make it seem as though you are a novice.
  • Some people may find it offensive.
  • You may not be able to secure funding and keep it confidential.

Who Signs a Confidentiality Statement of a Business Plan?

In typical fashion, confidentiality agreements would precede or accompany a business plan submission. When requiring the signing of a confidentiality agreement, you should require signing by anyone who you anticipate will see the plan to ensure the information contained in it is confidential.

Considerations

There are some considerations that need to be made before deciding to use a confidentiality agreement. The first is that your confidentiality agreement is not only protecting an invention, but it also should be used to protect:

  • Business ideas.
  • Strategies.

Until you have received financing or the investment you need to get your business started, anyone will be able to create an identical business without having to ask permission.

It is also important when drafting a confidentiality agreement that it is simply stated and clearly outlines what needs to be protected and what can occur if the agreement is violated. The agreement should be non-intimidating in its verbiage. you can use this agreement for anyone who you may be in contact with about your business before it is stared such as financers, clients, and potential vendors.

If you need help with a business confidentiality statement, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

Hire the top business lawyers and save up to 60% on legal fees

Content Approved by UpCounsel

  • Confidentiality Agreement
  • Purpose of a Confidentiality Agreement
  • Confidentiality Contracts
  • Penalty for Breach of Confidentiality
  • How to Draft a Confidentiality Agreement
  • Drafting Confidentiality Agreements: What You Need to Know
  • Confidentiality Clause Sample
  • Confidentiality Agreement Law
  • Confidentiality Agreement for Business Partners
  • Confidentiality Agreement Consideration

Business Plan Non-Disclosure Agreement (NDA)

statement of confidentiality business plan

The business plan non-disclosure agreement is intended for use when sharing a business plan with consultants, investors, contractors, potential employees, and anyone else evaluating your planned enterprise. Regardless of the size or complexity of your plan, it is likely to include confidential information that hopefully gives you an advantage over competitors. Such information could include your marketing plan, revenue forecast, and capital spending. Note, if you use an NDA with your business plan with one person, you must use NDAs for all who read it, and you should mark the plan as “confidential.”

Product Development NDA – Use when consulting with third (3rd) parties about a potential invention and its use and functionality.

BUSINESS PLAN NON-DISCLOSURE AGREEMENT   This agreement (the “Agreement”) between _________________ (the “Disclosing Party”) and _________________ (the “Receiving Party”) is effective _________________ and is intended to prevent the unauthorized disclosure of Confidential Information (as defined below) contained in and relating to the business plan of Disclosing Party. The parties agree as follows: 1. Confidential Information “Confidential Information” is proprietary trade secret information contained within and relating to Disclosing Party’s business plan including but not limited to: business description, marketing plan, sales revenue forecast, profit and loss forecast, capital spending plan, cash flow forecast, future trends, personnel plan, business goals, personal financial statement, supporting documents and information conveyed in writing or in discussion that is indicated to be confidential. 2. Non-Disclosure Receiving Party will treat Confidential Information with the same degree of care and safeguards that it takes with its own Confidential Information, but in no event less than a reasonable degree of care. Without Disclosing Party’s prior written consent, Receiving Party will not: (a)  disclose Confidential Information to any third party; (b)  make or permit to be made copies or other reproductions of Confidential Information; or (c)  make any commercial use of Confidential Information. Receiving Party will carefully restrict access to Confidential Information to those of its officers, directors and employees who are subject to non-disclosure restrictions at least as protective as those set forth in this Agreement and who clearly need such access to participate on Receiving Party’s behalf in the analysis and negotiation of a business relationship or any contract or agreement with Disclosing Party. Receiving Party will advise each officer, director or employee to whom it provides access to any Confidential Information that they are prohibited from using it or disclosing it to others without Disclosing Party’s prior written consent. 3. Return of Business Plan Materials Upon Disclosing Party’s request, Receiving Party shall within 30 days return all original materials provided by Disclosing Party and any copies, notes or other documents in Receiving Party’s possession pertaining to Confidential Information. 4. Exclusions This agreement does not apply to any information that: (a)  was in Receiving Party’s possession or was known to Receiving Party, without an obligation to keep it confidential, before such information was disclosed to Receiving Party by Disclosing Party; (b)  is or becomes public knowledge through a source other than Receiving Party and through no fault of Receiving Party; (c)  is or becomes lawfully available to Receiving Party from a source other than Disclosing Party; or (d)  is disclosed by Receiving Party with Disclosing Party’s prior written approval. 5. Term This Agreement and Receiving Party’s duty to hold Confidential Information in confidence shall remain in effect until _________________ or until whichever of the following occurs first: (a)  Disclosing Party sends Receiving Party written notice releasing it from this Agreement, or (b)  Confidential Information disclosed under this Agreement ceases to be a trade secret. 6. No Rights Granted This Agreement does not constitute a grant or an intention or commitment to grant any right, title or interest in Confidential Information to Receiving Party. 7. Warranty Disclosing Party warrants that it has the right to make the disclosures under this Agreement. 8. General Provisions (a)  Relationships.  Nothing contained in this Agreement shall be deemed to constitute either party a partner, joint venturer or employee of the other party for any purpose. (b)  Severability.  If a court finds any provision of this Agreement invalid or unenforceable, the remainder of this Agreement shall be interpreted so as best to effect the intent of the parties. (c)  Integration.  This Agreement expresses the complete understanding of the parties with respect to the subject matter and supersedes all prior proposals, agreements, representations and understandings. This Agreement may not be amended except in a writing signed by both parties. (d)  Waiver.   The failure to exercise any right provided in this Agreement shall not be a waiver of prior or subsequent rights. (e)  Injunctive Relief.  Any misappropriation of Confidential Information in violation of this Agreement may cause Disclosing Party irreparable harm, the amount of which may be difficult to ascertain, and therefore Receiving Party agrees that Disclosing Party shall have the right to apply to a court of competent jurisdiction for an order enjoining any such further misappropriation and for such other relief as Disclosing Party deems appropriate. This right of Disclosing Party is to be in addition to the remedies otherwise available to Disclosing Party. (f)   Indemnity.  Receiving Party agrees to indemnify Disclosing Party against any and all losses, damages, claims or expenses incurred or suffered by Disclosing Party as a result of Receiving Party’s breach of this Agreement. ( g)  Attorney Fees and Expenses.   In a dispute arising out of or related to this Agreement, the prevailing party shall have the right to collect from the other party its reasonable attorney fees and costs and necessary expenditures. (h)  Governing Law. This Agreement shall be governed in accordance with the laws of the State of _________________. (i)   Jurisdiction.   The parties consent to the exclusive jurisdiction and venue of the federal and state courts located in _________________ in any action arising out of or relating to this Agreement. The parties waive any other venue to which either party might be entitled by domicile or otherwise. ( j)   Successors & Assigns . This Agreement shall bind each party’s heirs, successors and assigns. Receiving Party may not assign or transfer its rights or obligations under this Agreement without the prior written consent of Disclosing Party. However, no consent is required f­or an assignment or transfer that occurs: (a) to an entity in which Receiving Party owns more than fifty percent of the assets; or (b) as part of a transfer of all or substantially all of the assets of Receiving Party to any party. Any assignment or transfer in violation of this section shall be void.   Disclosing Party: _____________________________________________ (Signature) _____________________ (Typed or Printed Name) Title: _____________________ Date: _____________________   Receiving Party: _____________________________________________ (Signature) _____________________ (Typed or Printed Name) Title: _____________________ Date: _____________________

How to Write

EXPLANATION FOR BUSINESS PLAN NON-DISCLOSURE AGREEMENT

Below we provide an explanation for each of the provisions of the Business Plan Non-Disclosure Agreement.

Introductory Paragraph

Fill in your company name (you are the disclosing party).  Fill in the name of the outside individual or company being granted access to your trade secrets (the Receiving Party). Finally, fill in the date the agreement will take effect. This can be the date it’s signed or a date in the future.

1. Confidential Information

This section defines what is protected against disclosure. Keep in mind that if you are disclosing information in conjunction with the plan, you should designate that information as confidential. If the information is spoken, you should announce the confidentiality.

2. Non-Disclosure

This clause makes clear that your trade secrets must be kept in confidence by the receiving party and may not be revealed to others without your prior written consent.

3. Return of Business Plan Materials

Here, the receiving party promises to return your business plan and related materials provided by your company, as well as copies, notes, and documents pertaining to the business plan. The agreement gives the receiving party 30 days to return the materials, but you can change this time period if you wish.

4. Exclusions

This provision describes all the types of information that are not covered by the agreement. These exclusions are based on court decisions and state trade secret laws that say these types of information do not qualify for trade secret protection.

This clause provides the receiving party with an expiration date for the agreement. The Agreement should last as long as the information is likely to remain a trade secret. Five years is a common period, but it can be much shorter, even as little as six months. In Internet and technology businesses, the time period may need to be shorter because of the fast pace of innovation.

6. No Rights Granted

This clause makes clear that you are not granting any ownership rights in the confidential informat­ion to the receiving party.

7. Warranty

A warranty is a promise. Here, you promise the receiving party that you have the right to disclose the information. This is intended to assure the receiving party that it won’t be sued by some third party claiming that the trade secrets belonged to it and that you had no right to reveal them to the receiving party.

8. General Provisions

These miscellaneous provisions (often referred to as “boilerplate”) are often grouped together at the end of an agreement.

Relationships . Most agreements include a provision like this one, disclaiming any relationship other than that defined in the agreement.

Severability . The severability clause provides that if you wind up in a lawsuit over the agreement and a court rules that one part of the agreement is invalid, that part can be cut out and the rest of the agreement will remain valid.

Integration . The integration provision verifies that the version you are signing is the final version and that neither of you can rely on statements made in the past.

Waiver . This provision states that even if you don’t promptly complain about a violation of the NDA, you still have the right to complain about it later.

Injunctive Relief . An injunction is a court order directing a person to do (or stop doing) something. If someone violated your NDA, you would want a court order directing that person to stop using your secrets.

Indemnity . Some NDAs require the receiving party to pay for all damages (lost profits, attorney fees or other expenses) incurred by the other party as a result of the receiving party’s breach of the non-disclosure agreement. This obligation is known as indemnification. Leaving out the indemnity provision does not prevent you from suing and collecting damages for a breach (contract law holds the receiving party responsible for a breach), but the clause makes it easier to claim damages.

Attorney Fees and Expenses. If you don’t include an attorney fees clause in your agreement, a judge may (in most states) order the award of attorney fees in cases where the theft of the trade secret was willful and malicious. It’s up to the judge, which makes things unpredictable. You are far better off using an attorney fees provision. However, don’t be surprised if the other party is opposed to the idea. Why? Because it is the receiving party that is usually sued, not vice-versa, and the receiving party may believe that the provision will encourage you to litigate.

Governing Law . You can choose any state’s laws to govern the agreement, regardless of where you live or where the agreement is signed. Most businesses favor the state where their headquarters are located.

Jurisdiction . The purpose of adding a jurisdiction provision to an NDA is to get each party to consent in advance to jurisdiction in one county or state and to give up the right to sue or be sued anywhere else.

Successors and Assigns . This provision binds any company that acquires either party.

Signing the agreement. Someone with the necessary authority must sign the agreement on behalf of each party. Each party should sign two copies and keep one. This way, both parties have an original signed agreement.

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Business Plan Confidentiality Agreement

A business plan confidentiality agreement (or NDA) is used when sharing a business idea or plan with consultants, investors, or anyone else that is evaluating your business. It establishes what information cannot be shared and prevents any misunderstandings. This confidentiality agreement is used as a legally binding document with the parties that are meeting each other. It will help establish definitions about trade secrets and when information can be shared.

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The Importance of a Business Plan NDA

Risks of not using it, what to include in a business plan non-disclosure agreement.

Even when a business is new, there can still be plans or ideas that can be stolen. Having an NDA agreement for a business plan prevents your unique ideas from being misused by another party.

As with any confidentiality agreement, a business plan NDA will keep your information safe. You will know that your business idea will not be used by someone else. Your plan may have potential trade secrets and other company secrets that you do not want public. A statement of confidentiality will prevent that from happening.

Using a business plan disclosure agreement can prepare you for using NDAs for your business career, both with third parties and employees. Many businesses have trade secrets and confidential information that you want to control the release of. Using the nda template from the beginning will help your business establish good practices.

A business plan covers many different ideas and aspects of running a business. Marketing, competition, and finances are all included. This is valuable information that you want to protect, in many cases for the entire time you are running your business.

Business plans cover a lot of important information that you will want to protect, oftentimes for the entire time it’s operating. Keeping these plans safe will help your business have a successful start and continue to grow.

Aspects of your business plans that you will want to be protected by a business plan confidentiality agreement include market analysis and strategy, list of competitors, staffing and employee plans, and financial data.

This research and planning cover not only your business idea but what you have discovered about other businesses in a similar market. These plans can be protected with a non-disclosure agreement for a business plan to help you keep the right information safe.

When you don’t use a business plan confidentiality agreement you have the risk of your business idea being used or sold without your permission. It would be a shame if all of the time and energy that you spent on developing just the right ideas were used by someone else. Business plans being stolen is a real threat and you want to protect yourself from it.

If the worst-case scenario occurs and the business idea is stolen from you, a business plan confidentiality agreement will also give you recourse options, including compensation. It will save you time and money to establish what information was publicly known and what was revealed during the business plan meeting.

With a confidentiality agreement, all parties have agreed to what information was not allowed to be shared, making getting legal help easier. There will be less confusion with NDAs signed before any confidential information is shared.

Template Preview

A business plan non-disclosure agreement should include many similar aspects of other statements of confidentiality. These agreements define the terms of what is confidential and what can happen if there is a breach of contract.

1. Define Confidential Information

The first item to include in a non-disclosure agreement for a business plan is to define confidential information and how it applies in this document. It can include revenue predictions, spending plans, and predicted future trends among many other aspects of running a business. Without these terms being defined.

2. The Agreement of Confidentiality

The next item to include is the agreement of confidentiality on the receiving parties. This includes talking about what is the meeting, making copies of any documents, or making commercials from the topics discussed. This will also cover how the receiving party will handle being asked about confidential information.

In cases where documents and materials are being shared, a confidentiality agreement will also disclose that these materials be returned within a time frame. The receiving party cannot make copies or share this information without the consent of the business owner.

3. Exclusions

Exclusions are included in a business plan confidentiality agreement to cover what the receiving party already knew before the agreement, if information becomes public knowledge, or is available through other sources legally.

4. Duration

A non-disclosure agreement for a business plan also covers how long the agreement is in effect. This can be until a specified date or certain provisions are met, such as being released from the confidentiality agreement or the information stops being a trade secret.

5. Courts and Contracts

A statement of confidentiality will also include general provisions about if the agreement is determined to be void by a court and an agreement that the current contract supersedes previous contracts and agreements.

6. Legal Ramifications

Legal ramifications for a breach of the confidentiality agreement are also included. This can include legal action and pay for legal fees. These fees will be paid to the disclosing party or business owner, from the receiving party to cover damages and loss of business from the broken contract.

Once the business plan confidentiality agreement is signed and dated, the contract is placed into effect unless otherwise made void.

When drafting a confidentiality agreement for a business idea, you want to use the right language and organize it correctly. They can cover a lot of information and you want to ensure that all the right information is accounted for to protect your business plans.

ProfitableVenture

How to Write a Business Plan Confidentiality Agreement

By: Author Tony Martins Ajaero

Home » Business Plans

Are you about pitching your idea to investors? If YES, here is a detailed guide on how to write an ironclad confidentiality agreement for a business plan. Confidentiality statements are documents that are prepared for the safety of parties that are about to go into a business contract.

Also known as non-disclosure agreements, confidentiality statements help to preserve sensitive information that various business parties might bring to the table when transacting business. Business confidentiality statement in essence is a document that states that when a company’s business plan has been revealed, they will not be able to discuss the contents of it with anyone that is not part of the agreement.

Confidentiality or nondisclosure agreement has various uses in the world of business. An individual with a patentable invention or idea may need to enter into partnership with a manufacturer or marketing firm; and of course, he would want to keep his or her invention a secret.

Again, two companies considering a joint venture may need to share the names of their investors – but may not want those names to reach competitors’ ears. Confidentiality agreements can cover all these scenarios; the parties can tailor them to their specific needs before a meeting or negotiation, or over the course of a contractual relationship.

Tips to Note When Writing a Business Plan Confidentiality Statement

A. use the proper contract format.

The proper contract format that is generally used when writing a confidentiality statement is the standard contract format. In this writing format, single-spaced paragraphs with a double space between them is used. Each paragraph constitutes a separate term of the contract and are also numbered for specification. If you have any sub-paragraphs, indent them under the main paragraph and mark them with a letter, as though you were writing an outline.

B. Agreement type

There are two types of agreement to use when writing your confidentiality statement. A unilateral and mutual confidentiality agreement. A unilateral confidentiality agreement is used when only one party is disclosing information, while a mutual agreement is used when both or all parties involved are disclosing information.

You have to decide whether the confidential relationship established will be mutual or one-way. Mutual confidentiality agreements are necessary when you’re providing information to a company so they can provide you with something secret in return. For example, you may be disclosing your plans for a secret invention to a professional who will help you devise 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, simply doing work for you. There are also other scenarios where you may require either type of agreement, that is why you have to note the type of confidentiality agreement you need.

How to Write an Ironclad Business Plan Confidentiality Agreement

Provide a list of parties involved in the agreement.

When writing a confidential agreement, you must identify who are the parties to be covered by the agreement. If someone is to be involved in the agreement, but he or she is not listed, you must know that the agreement is not binding on them.

For example, if the agreement is between two companies, the CEO of the company may be able to sign for her entire company, but the agreement should also specify that all employees of the company who have access to the information are bound by its provisions.

Parties can be identified by referring to classes of people, such as “employees” or “engineers,” as long as the person signing the agreement has the authority to bind those people.

Unless the agreement forbids a contractor to have a subcontractor assist with the work, all subcontractors should be included as parties to the agreement as well. This is done so as not to leave any loopholes behind that people can take advantage of.

Describe what the other party is agreeing to

In this part, you need to make known the types of information you wish to keep confidential. This can include any sort of information that might be exchanged between the parties. For instance, if you are designing a software, 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 designers.

This portion of the agreement is designed to set the boundaries of confidential information without disclosing the information itself. It can also be stated that information cannot be disclosed without written consent of the Disclosing Party. The information should only be used for business purposes, and only on a “need to know” basis. And that the information can only be disclosed when the receiving party signs a non disclosure agreement .

List information excluded from confidentiality

Of course not all information should be hidden in a business arrangement. So, for this reason, you need to specify the information that are not under confidentiality. These information may not be a list of specific things, but broad categories of information that don’t have to be protected as confidential. Most of these categories are created by law.

For instance, if an information is already public knowledge then it is not be put under the category of protection. Likewise, information that the receiving party learns from a third party or of which they had prior knowledge cannot be considered confidential, and should be listed as non confidential.

One of the most important exclusions is that if the receiver creates something independently before entering the confidential relationship, it cannot be considered party of the confidentiality agreement even if it happens to use or include some of the same or similar secret information or processes.

Other things that are not under the confidentiality agreement include;

  • An information the Receiving Party owned before the agreement
  • If the Receiving Party legally received it from another source
  • If the Receiving Party is required to disclose in a lawsuit or administrative proceeding
  • If it is being or has been developed by the Receiving Party’s employees, consultants, or agents.

Describe what happens if the other party breaches the contract

Wherever there is a law, there must be consequences for breaking it. A typical remedy for this type of contract is an injunction. You can ask for a court order to stop the person who breached confidentiality from continuing to share the information in violation of the agreement.

In some federal cases, under the DTSA, a court may grant the owner the right to seize the property which may be used in “extraordinary circumstances.” You may also require the return of Confidential Information.

You also have the ability to sue for damages incurred as a result of the breach of confidentiality, which may include penalties. For example, in some states you may have the ability to get double or triple damages if the breach was intentional rather than accidental.

Some confidentiality agreements include stiff financial penalties if secret information is revealed to the general public. Others leave the consequences up to a judge or arbitrator to decide. How detailed you want to get with penalties generally relates to how unique the information being disclosed is, and how damaging it would be if it got out.

Establish the obligations of the party receiving the information

Confidentiality agreements typically limit the ways the receiving party can use the confidential information provided, as well as provide the standard for keeping and protecting confidential information.

For example, if you’re looking for investor evaluations of something you’ve invented, your confidentiality agreement may specify that the information can only be used for the purposes 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 would probably want to limit your employee’s use of information to the performance of job duties directly related to the employment.

Many confidentiality agreements recite that receivers must keep the information disclosed to them in the same way they would keep their own confidential information. However, this statement only works if the receiving party has a known policy for handling confidential information.

Generally, confidentiality standards include limiting access to the information and taking basic precautions to keep the information secure so it doesn’t easily fall into outside hands. Such precautions might include, for example, using encryption for emails discussing the confidential information.

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 information by virtue of its disclosure.

State when the agreement ends

Whatever has a beginning must have an end, and same applies to a confidentiality agreement. In writing one, you have to specify when the agreement is going to elapse, and when the parties can get out of the loop. State when the agreement ends and what notice must be given to the other party about the termination. You can set one of two options for when the agreement ends:

Your agreement should specify two time periods: the period during which disclosure will be made, and the time period thereafter during which the information should be kept confidential.

American confidentiality agreements typically last for a period of five years, although some may only last two or three years. The end point doesn’t have to be a specific date, but there should be a specific date used as a starting point. Otherwise it’s unclear when the agreement will take effect and for how long it will be enforceable.

If your agreement specifies a confidentiality period of two years, for example, 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.

Another way to set a specific starting date is to have the confidentiality period start from the date the agreement is signed. If you use this method, make sure you don’t disclose any secrets until you have the signature and the agreement is in force.

The confidentiality time period also may end when a certain event happens. For example, if you’re seeking evaluation of a new product, the confidentiality period may end when you market and distribute that product in stores.

Add any necessary miscellaneous provisions

This section is typically located towards the end. The miscellaneous section is 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 if they agreement is breached. These agreements are then put under the miscellaneous section. This section, though negligent, but should not be overlooked because of the details it is wont to contain.

Provide space for all parties to sign the agreement

For your confidentiality agreement to be binding, it has to be signed. For this reason, you have to provide a page where parties involved in the agreement would pen down their signatures. Without the agreement signed, it cannot go into effect.

With the use of a confidentiality statement, otherwise known as a non-disclosure agreement, the parties can keep nonpublic information under wraps. These contracts bind the parties to very specific pledges on the disclosure of information and are enforceable under the laws of the state where they are created.

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Your Confidentiality Agreement

CONFIDENTIALITY AGREEMENT

THIS CONFIDENTIALITY AGREEMENT ("the Agreement") dated this ________ day of ________________, ________.

____________________ of ____________________________________________________________ (the "Employer")

OF THE FIRST PART

____________________ of ____________________________________________________________ (the "Employee")

OF THE SECOND PART

BACKGROUND:

  • The Employee is currently or may be employed as an employee with the Employer for the position of: __________. In addition to this responsibility or position (the "Employment"), this Agreement also covers any position or responsibility now or later held with the Employer.
  • The Employee will receive from the Employer, or develop on the behalf of the Employer, Confidential Information as a result of the Employment (the "Permitted Purpose").

IN CONSIDERATION OF and as a condition of the Employer employing the Employee and the Employer providing the Confidential Information to the Employee in addition to other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, the parties to this Agreement agree as follows:

  • Confidential Information
  • All written and oral information and materials disclosed or provided by the Employer to the Employee under this Agreement constitute Confidential Information regardless of whether such information was provided before or after the date of this Agreement or how it was provided to the Employee.
  • The Employee acknowledges that in any position the Employee may hold, in and as a result of the Employee's employment by the Employer, the Employee will, or may, be making use of, acquiring or adding to information about certain matters and things which are confidential to the Employer and which information is the exclusive property of the Employer.
  • 'Business Operations' which includes internal personnel and financial information of the Employer, vendor names and other vendor information (including vendor characteristics, services and agreements), purchasing and internal cost information, internal services and operational manuals, external business contacts including those stored on social media accounts or other similar platforms or databases operated by the Employer, and the manner and methods of conducting the Employer's business;
  • 'Customer Information' which includes names of customers of the Employer, their representatives, all customer contact information, contracts and their contents and parties, customer services, data provided by customers and the type, quantity and specifications of products and services purchased, leased, licensed or received by customers of the Employer;
  • 'Intellectual Property' which includes information relating to the Employer's proprietary rights prior to any public disclosure of such information, including but not limited to the nature of the proprietary rights, production data, technical and engineering data, technical concepts, test data and test results, simulation results, the status and details of research and development of products and services, and information regarding acquiring, protecting, enforcing and licensing proprietary rights (including patents, copyrights and trade secrets);
  • 'Service Information' which includes all data and information relating to the services provided by the Employer, including but not limited to, plans, schedules, manpower, inspection, and training information;
  • 'Product Information' which includes all specifications for products of the Employer as well as work product resulting from or related to work or projects performed or to be performed for the Employer or for clients of the Employer, of any type or form in any stage of actual or anticipated research and development;
  • 'Production Processes' which includes processes used in the creation, production and manufacturing of the work product of the Employer, including but not limited to, formulas, patterns, molds, models, methods, techniques, specifications, processes, procedures, equipment, devices, programs, and designs;
  • 'Accounting Information' which includes, without limitation, all financial statements, annual reports, balance sheets, company asset information, company liability information, revenue and expense reporting, profit and loss reporting, cash flow reporting, accounts receivable, accounts payable, inventory reporting, purchasing information and payroll information of the Employer;
  • 'Marketing and Development Information' which includes marketing and development plans of the Employer, price and cost data, price and fee amounts, pricing and billing policies, quoting procedures, marketing techniques and methods of obtaining business, forecasts and forecast assumptions and volumes, and future plans and potential strategies of the Employer which have been or are being discussed;
  • 'Computer Technology' which includes all scientific and technical information or material of the Employer, pertaining to any machine, appliance or process, including but not limited to, specifications, proposals, models, designs, formulas, test results and reports, analyses, simulation results, tables of operating conditions, materials, components, industrial skills, operating and testing procedures, shop practices, know-how and show-how;
  • 'Proprietary Computer Code' which includes all sets of statements, instructions or programs of the Employer, whether in human readable or machine readable form, that are expressed, fixed, embodied or stored in any manner and that can be used directly or indirectly in a computer ('Computer Programs'); any report format, design or drawing created or produced by such Computer Programs; and all documentation, design specifications and charts, and operating procedures which support the Computer Programs; and
  • Confidential Information will also include any information that has been disclosed by a third party to the Employer and is protected by a non-disclosure agreement entered into between the third party and the Employer.
  • Information that is generally known in the industry of the Employer;
  • Information that is now or subsequently becomes generally available to the public through no wrongful act of the Employee;
  • Information rightly in the possession of the Employee prior to receiving the Confidential Information from the Employer;
  • Information that is independently created by the Employee without direct or indirect use of the Confidential Information; or
  • Information that the Employee rightfully obtains from a third party who has the right to transfer or disclose it.
  • Confidential Obligations
  • Except as otherwise provided in this Agreement, the Employee must keep the Confidential Information confidential.
  • Except as otherwise provided in this Agreement, the Confidential Information will remain the exclusive property of the Employer and will only be used by the Employee for the Permitted Purpose. The Employee will not use the Confidential Information for any purpose that might be directly or indirectly detrimental to the Employer or any associated affiliates or subsidiaries.
  • The obligations to ensure and protect the confidentiality of the Confidential Information imposed on the Employee in this Agreement and any obligations to provide notice under this Agreement will survive the expiration or termination, as the case may be, of this Agreement and those obligations will last indefinitely.
  • the Employee has informed such personnel of the confidential nature of the Confidential Information;
  • such personnel agree to be legally bound to the same burdens of confidentiality and non-use as the Employee;
  • the Employee agrees to take all necessary steps to ensure that the terms of this Agreement are not violated by such personnel; and
  • the Employee agrees to be responsible for and indemnify the Employer for any breach of this Agreement by their personnel.
  • to a third party where the Employer has consented in writing to such disclosure; and
  • to the extent required by law or by the request or requirement of any judicial, legislative, administrative or other governmental body.
  • Ownership and Title
  • The Employee acknowledges and agrees that all rights, title and interest in any Confidential Information will remain the exclusive property of the Employer. Accordingly, the Employee specifically agrees and acknowledges that the Employee will have no interest in the Confidential Information, including, without limitation, no interest in know-how, copyright, trademark or trade names, notwithstanding the fact that the Employee may have created or contributed to the creation of that Confidential Information.
  • The Employee does hereby waive any moral rights that the Employee may have with respect to the Confidential Information.
  • was developed without the use of any equipment, supplies, facility or Confidential Information of the Employer;
  • was developed entirely on the Employee's own time;
  • does not relate to the actual business or reasonably anticipated business of the Employer;
  • does not relate to the actual or demonstrably anticipated processes, research, or development of the Employer; and
  • does not result from any work performed by the Employee for the Employer.
  • The Employee agrees to immediately disclose to the Employer all Confidential Information developed in whole or in part by the Employee during the term of the Employment and to assign to the Employer any right, title or interest the Employee may have in the Confidential Information. The Employee agrees to execute any instruments and to do all other things reasonably requested by the Employer (both during and after the term of the Employment) in order to vest more fully in the Employer all ownership rights in those items transferred by the Employee to the Employer.
  • The Employee agrees and acknowledges that the Confidential Information is of a proprietary and confidential nature and that any failure to maintain the confidentiality of the Confidential Information in breach of this Agreement cannot be reasonably or adequately compensated for in money damages and would cause irreparable injury to the Employer. Accordingly, the Employee agrees that the Employer is entitled to, in addition to all other rights and remedies available to it at law or in equity, an injunction restraining the Employee and any agents of the Employee, from directly or indirectly committing or engaging in any act restricted by this Agreement in relation to the Confidential Information.
  • Return of Confidential Information
  • may contain or be derived from ideas, concepts, creations, or trade secrets and other proprietary and Confidential Information as defined in this Agreement; or
  • is connected with or derived from the Employee's services to the Employer.
  • In the event that the Employee is required in a civil, criminal or regulatory proceeding to disclose any part of the Confidential Information, the Employee will give to the Employer prompt written notice of such request so the Employer may seek an appropriate remedy or alternatively to waive the Employee's compliance with the provisions of this Agreement in regards to the request.
  • If the Employee loses or fails to maintain the confidentiality of any of the Confidential Information in breach of this Agreement, the Employee will immediately notify the Employer and take all reasonable steps necessary to retrieve the lost or improperly disclosed Confidential Information.
  • Any notices or delivery required in this Agreement will be deemed completed when hand-delivered, delivered by agent, or seven days after being placed in the post, postage prepaid, to the parties at the addresses contained in this Agreement or as the parties may later designate in writing.
  • Name: ____________________ Address: ____________________________________________________________
  • Representations
  • In providing the Confidential Information, the Employer makes no representations, either expressly or impliedly as to its adequacy, sufficiency, completeness, correctness or its lack of defect of any kind, including any patent or trademark infringement that may result from the use of such information.
  • Termination
  • This Agreement will automatically terminate on the date that the Employee's Employment with the Employer terminates or expires, as the case may be. Except as otherwise provided in this Agreement, all rights and obligations under this Agreement will terminate at that time.
  • Except where a party has changed its corporate name or merged with another corporation, this Agreement may not be assigned or otherwise transferred by either party in whole or part without the prior written consent of the other party to this Agreement.
  • This Agreement may only be amended or modified by a written instrument executed by both the Employer and the Employee.
  • Governing Law
  • This Agreement will be construed in accordance with and governed by the laws of the State of California.
  • General Provisions
  • Time is of the essence in this Agreement.
  • This Agreement may be executed in counterpart.
  • Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.
  • The clauses, paragraphs, and subparagraphs contained in this Agreement are intended to be read and construed independently of each other. If any part of this Agreement is held to be invalid, this invalidity will not affect the operation of any other part of this Agreement.
  • The Employee is liable for all costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by the Employer in enforcing this Agreement as a result of any default of this Agreement by the Employee.
  • The Employer and the Employee acknowledge that this Agreement is reasonable, valid and enforceable. However, if a court of competent jurisdiction finds any of the provisions of this Agreement to be too broad to be enforceable, it is the intention of the Employer and the Employee that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable, bearing in mind that it is the intention of the Employee to give the Employer the broadest possible protection to maintain the confidentiality of the Confidential Information.
  • No failure or delay by the Employer in exercising any power, right or privilege provided in this Agreement will operate as a waiver, nor will any single or partial exercise of such rights, powers or privileges preclude any further exercise of them or the exercise of any other right, power or privilege provided in this Agreement.
  • This Agreement will inure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns, as the case may be, of the Employer and the Employee.
  • This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

IN WITNESS WHEREOF ____________________ and ____________________ have duly affixed their signatures under hand and seal on this ________ day of ________________, ________.

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What is a Confidentiality Agreement?

A Confidentiality Agreement, also known as a privacy agreement, is a legally binding contract that individuals or businesses use to protect sensitive information. The purpose of this contract is to:

  • Clearly describe what information is confidential
  • Outline the permitted uses for the information
  • Document the receiving party’s promise to abide by the agreement
  • Acknowledge the options for enforcing the agreement

There are two parties to a Confidentiality Agreement:

  • The disclosing party that reveals the confidential information
  • The receiving party that agrees to keep the information confidential

Each of these parties may comprise of one or more individuals or entities. For example, if a partnership is hiring a consultant, the signatures of all the partners may be required. When filling out LawDepot’s Confidentiality Agreement form, be sure to include the names of all the people involved in the transaction.

Our online form is simple to fill out and readily available to download or print. You can view a sample draft of a Confidentiality Agreement above.

What is confidential information?

Confidential information refers to any facts, details, or data that are not common knowledge or part of the public domain. The information typically has commercial value and is reasonably protected.

For instance, a Confidentiality Agreement can protect the disclosure of various types of information, including:

  • Customer information : customer or client data such as names, contact details, internet browsing history, GPS tracking, and more
  • Intellectual property : any intangible asset that has commercial value, such as copyrights, patents, trademarks, and trade secrets
  • Marketing, product, and service information : proprietary information such as strategic functions, marketing plans, production processes, and more
  • Business operations and accounting information : intangible business assets such as data on vendors, staff, fixed costs, and other internal financial reports

What is not confidential information?

Information is no longer confidential once it becomes known to the public at large.

States may limit the situations in which someone can rely on a Confidentiality Agreement. On the other hand, a judge might compel a witness to give testimony on the subject matter of a Confidentiality Agreement signed by that witness (but only if there is an overriding public interest). 

When should I use a Confidentiality Agreement?

A Confidentiality Agreement is often used in the workplace or during business negotiations that involve the disclosure of commercially sensitive information, such as:

  • When an employee or contractor gains access to new information not covered in the original contracts with their employer or client
  • When an employer gives a salary raise , bonus checks, or other compensation packages that they want to keep private
  • When a company makes its financial accounts available to a prospective buyer during negotiations for the sale of the business
  • When an inventor shows their invention to secure financial backing from a potential investor

How long should a Confidentiality Agreement last?

The obligations created by a Confidentiality Agreement can be ongoing or end on a specific date.

To specify an end date, consider when the relationship between the two parties ends or when the information no longer needs to be confidential because it’ll be in the public domain.

If a date isn’t specified, the information should remain confidential indefinitely. In other words, the duty of confidentiality will not expire.

It’s important to note, however, that trade secrets must always be kept as confidential information . These are considered valuable business assets essential to the competitiveness of the company and are generally protected by the Economic Espionage Act of 1996 and the Defend Trade Secrets Act of 2016 .

What other restrictions can I include in a Confidentiality Agreement?

A Confidentiality Agreement can also include restrictive covenants , which are clauses in a contract that limit or prohibit certain behaviors that may risk the success of a business.

However, a word of caution: for your document to be enforceable, the time limits and the impact that these clauses have on the parties involved must be fair and reasonable .

Non-competition clause

Also known as an exclusivity clause , this provision aims to prevent an employee from using insider knowledge to compete for business with their employer. This term may be in effect while the employee works for the company or for a certain length of time after they leave.

Typically, a non-competition clause prohibits a person from:

  • Giving advice, money, or skilled labor to a competing business or individual
  • Directly competing for business as an owner, sole-proprietor, partner, or otherwise

Non-solicitation clause

This provision aims to prevent an employee from interfering in the employer’s relationship with other employees or contractors.

Any such interference could be damaging to the business. It would be an unfair advantage for the employee or former employee to use insider knowledge of the employment terms of other workers to lure them away.

A non-solicitation term may be in effect while the employee works for the company or for a certain length of time after they leave.

Typically, this clause prohibits the individual from:

  • Convincing an employee or contractor to quit
  • Discussing other employment opportunities with employees or contractors
  • Hiring an employee or contractor to work for a competing business

What happens when someone breaches a Confidentiality Agreement?

If the receiving party violates the agreement and leaks confidential information, the disclosing party can take legal action against them . Your LawDepot Confidentiality Agreement will set out the legal remedies available in the event of a breach of contract. The first step is often to issue a Cease and Desist Letter to remind the receiving party of their contractual obligations.

The disclosing party may also seek injunctive relief (i.e., a court order that prohibits disclosure and mandates the return of any confidential data or documents). This may be the case when damages (i.e., monetary compensation) alone can’t make up for the breach. The party can obtain an interim injunction at short notice, ex parte , where only the side seeking the injunction is represented in court before a full hearing of the case.

However, legal actions are costly and time-consuming. Ideally, the parties should aim to resolve the dispute through negotiation or mediation .

Related documents

  • Cease and Desist Letter : Send this form to notify someone of their unacceptable behavior and to warn of legal action.
  • Non-Disclosure Agreement : You can use this contract in place of a Confidentiality Agreement if you prefer the name. Both contracts serve the same purpose.
  • Non-Compete Agreement : You can use this contract if the non-compete clause in the Confidentiality Agreement doesn’t suffice for your situation.
  • Partnership Agreement : Establish the rights and responsibilities of general partners and set the rules in a for-profit partnership.
  • Purchase of Business Agreement : Transfers the ownership of a business from a seller to a buyer, including the purchase of assets and shares.
  • Joint Venture Agreement : A contract that outlines the temporary business relationship between two companies.

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