Confidentiality agreements (or non-disclosure agreements (NDAs)) are frequently entered into to protect confidentiality of information disclosed during negotiations for all kinds of transactions such as for the sale of a business, the entry into a partnership or joint venture, when engaging an external consultant and in employment contracts.
Whilst the confidential information disclosed in these scenarios may be protected by general law (equity), it is often preferable to require recipients of confidential information to enter into confidentiality agreements before receipt so that:
- the recipient is prevented from claiming that the disclosed information is not confidential;
- the identity and scope of the confidential information, as well as any exceptions to the obligation of confidentiality, are clearly defined; and
- contractual rights and obligations, beyond the protections afforded by general law, are created.