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Writing a Business Plan Confidentiality Statement

Free Confidentiality Statement Template (NDA)

Ayush Jalan

• December 12, 2023

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

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

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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Home » Business Plan Tips

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.

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Article • 8 min read

Confidentiality in the Workplace

Understanding your obligations.

By the Mind Tools Content Team

Laura recently learned that her long-term client, Jim, is retiring. She was quite surprised, as the company he manages is launching a new business initiative, and she thought he would surely want to lead it through this exciting time.

Unfortunately, Laura then shared this information with another client, who happened to be an investor in Jim's company. The investor promptly backed out of his investment, sending Jim's company into a tailspin.

This is an example of how damaging breaches of workplace confidentiality can be – both for the organization you work for, and for your own career. That's why it's important that you know what your obligations are when it comes to workplace confidentiality.

But what actually constitutes confidential information? And how can you ensure that you don't breach confidentiality? We'll answer these questions, and more, in this article.

What Is Confidential Information?

Confidential information is information that needs to be restricted to authorized people only.

In the course of your job, you may come across a lot of confidential information. For instance, you might know sensitive information about your organization, such as its future plans, expected revenues, or the "trade secrets" that give it a competitive edge in the marketplace. You might also know similar information about your clients.

As well as this, you may come across confidential customer information like credit card numbers, bank details, or medical information.

Also, there may be employee information that you need to keep confidential, including salary details, performance reports, and medical data, as well as the type of personal information we looked at the start of this article.

Many business relationships are underpinned by confidentiality/non-disclosure agreements that define precisely what is considered – and is not considered – to be confidential. Employment contracts and service agreements typically contain these clauses as well. If you're wondering what is confidential or not, make sure that you read and understand these agreements in detail!

Overall, if you have any doubt about whether you should share information, treat it as confidential.

Consequences of Breaches in Confidentiality

Clearly, breaches of confidentiality are bad for business.

For instance, people don't want to do business with organizations that cannot be trusted to keep confidential information secret. And revealing private corporate information may damage your reputation and compromise your ability to get ahead in the workplace.

People also need to be confident that their private information will be kept confidential. This enables them to feel secure in the workplace, and prevents all sorts of internal problems.

Serious breaches of confidentiality can also lead to legal problems, disciplinary action, and criminal convictions. (Think of the havoc that could be caused by a breach of confidentiality during a merger or flotation.)

Protecting Confidential Information

Your workplace may already have clear rules regarding confidential information, and, if you work in a profession such as education or health, you may be bound by professional codes that protect the confidential information that you come across.

However, it can still be a challenge to protect confidential information in your team or organization, even if you know about the consequences of sharing that information.

Your approach depends on the nature of the confidential information that you're handling, and the consequences of a breach of confidentiality.

Start by analyzing the risks of a breach in confidentiality, and then develop an approach that addresses these risks effectively but efficiently, and with a minimum of bureaucracy. In many cases, it will be enough for people to know about confidentiality and act in a responsible way. In other cases, you'll need to be more rigorous in the way that you protect confidential information.

Ways to Protect Confidential Information

Depending on the consequences of a breach in confidentiality, you can protect confidential information with the following measures and strategies:

• Provide confidentiality training. This should include advice on not sharing confidential information unintentionally – for example, through gossiping, or with people outside of work.
• Only share confidential information with those who have a reason to know. The fewer people who know something, the easier it is to contain the information.
• Use confidentiality, nondisclosure, and non-compete agreements with employees, clients, and contractors to further protect your business. You should use these legal documents whenever you have to disclose confidential information to people outside your organization. (These agreements should be drawn up by a lawyer.)
• Where appropriate, have a confidentiality policy that describes what information is considered confidential, and which outlines how to manage and share confidential information within the organization. It can also define when confidentiality can be broken. This typically includes situations where there is a legal obligation to disclose information, when a criminal act has been committed, or when someone's health and safety is in jeopardy.
• Require the proper disposal of sensitive information: for example, by shredding documents with a cross-cut shredder, or by destroying old computer hardware. (Be aware that computer equipment that is "thrown away" may be salvaged rather than being sent to landfill.)
• Restrict the ability to view, remove, or copy confidential information. In a computerized environment, it's very easy to access and disseminate information. Encrypt highly sensitive information. Use passwords to protect and limit access to information. Also, be aware that there are different levels of encryption – some can be compromised quickly, while others are more secure. (Ask you IT department for help if you need to know more.)
• Stamp documents "confidential" if required. (But don't overuse this practice, as people then might ignore it.)
• Secure physical information and files using a lock and key or a safe. Be sure that you keep track of the keys, ask former employees to return their keys, and update access lists regularly.
• Require people who leave their employment to return all documentation and material to the organization.

Various privacy and confidentiality acts may govern confidentiality in your country or jurisdiction. These may include freedom of information acts, securities and trade laws, standards boards, and professional codes. Consult your lawyers to understand which regulations apply to you.

In many organizations, salary information is considered confidential, and people's salary and compensation arrangements should not be shared. (In many circumstances, salaries are negotiated, so comparing salaries among colleagues can cause issues with productivity and morale.)

If you work in accounts or human resources, or if you manage employee or personal data, you should take all measures necessary to secure information. This includes storing accounts and personnel files securely, and limiting the number of people who have access to this data.

Think about how your approach to confidentiality fits with other initiatives – for example, with whistleblowing policies and suchlike.

Confidential information is information that needs to be kept private and be restricted to only to a select group of people. Breaches in confidentiality at work can have very serious consequences.

You'll find detailed rules on what is and what is not confidential in the non-disclosure agreements and contracts that govern the way that you work. Make sure that you're familiar with the detail of these.

As a general rule, unless information is known to be public, then you should consider it confidential and not share it with anyone. If you have any doubt, don't share it.

You can protect confidential information in your organization by using common-sense strategies such as training and coaching employees, encrypting electronic files, and using nondisclosure agreements with employees and contractors.

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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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