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A Confidentiality Agreement, also known as a Non Disclosure Agreement or NDA is a commercial agreement between two people or companies where the parties agree to protect the Confidential Information of one or both of the parties.
Non-Disclosure Agreements or Confidentiality Agreements generally enable parties to reveal information with commercial value that they might otherwise keep secret, so that commercial negotiations can continue openly and honestly.
Some examples of situations where a Confidentiality Agreement might be needed include:
(a) where a company is engaging a new employee or contractor who will have access to secret information, trade secrets or other valuable commercial information of the company;
(b) where two parties are investigating the possibility of an investment or business sale agreement with each other, and wish to discuss commercially sensitive information;
(c) where a new start-up or inventor has an idea it wishes to discuss with another party to test the possibility of an investment or partnership.
A Confidentiality Agreement makes it so that the party receiving the confidential information isn't permitted to disclose that information to anyone else or profit from the use of that information in an unauthorised way.
How to use this document
This can be used either where only one party is disclosing information (a unilateral disclosure) or where two parties are sharing information with each other (a mutual disclosure).
Persons or organisations intending to rely on a Confidentiality Agreement should make sure that both parties sign the document, before any confidential information is shared. The Confidentiality Agreement is not effective unless it has been signed by both parties. It also may not protect information that has been shared before the Agreement was signed.
Where a party signing this agreement is a person, they should have a witness present when the document is signed.
Where the parties are companies, those parties should comply with the requirements of the Corporations Act by having the director sign the document (for sole director companies) or having a director and company secretary sign the document (for multiple director companies).
There is no law or regulation governing the use or terms of Confidentiality Agreements in Australia. The broad principles that apply to contract and restraints of trade are applicable to this Confidentiality Agreement.
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