Confidentiality agreements are frequently entered into to protect the disclosure of confidential information during negotiations for the sale of a business, for the purposes of 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.