Every business has secrets, or as we call it in the legal world, “confidential information.” The ability to hold that “confidential information” closely and in secret may be vital to the success of that business. Confidential information for a business is usually any information, knowledge, and/or data including but not limited to information concerning operations, intellectual property, clients, and finances, all of which may have an adverse economic impact on a business should that information become available to the public.
While businesses must protect their confidential information from third parties, there are circumstances that necessitate a business sharing its confidential information. Such circumstances customarily arise in the case of employees as well as evaluating potential business relationships or engaging in business with other third party companies and/or contractors to further its own business interests.
So, how does a business protect its confidential information? Well, certainly not by taking someone for his or her word that he or she “will keep a secret.” Sharing any confidential information absent having a written agreement to legally obligate a third party to the secrecy of such information is quite risky. Risky in that a third party may use that information to gain an unfair economic advantage. Thus, to mitigate this risk, it is highly recommended that businesses utilize a confidentiality disclosure agreement or include a confidentiality clause in its contracts.
In drafting such agreements or clauses, the following terms should be addressed, (1) what information is considered confidential; (2) what third parties can receive such confidential information; (3) the term of confidentiality: and (4) any legal remedies and damages that may or will be available in the event of a breach of confidentiality. These agreements and clauses are customarily legally enforceable, and provide the necessary protection that businesses need to avoid unfair and unauthorized use of its confidential information.
Please contact one of our trusted and experienced attorneys at Peace & Squires Law so that we can help your business legally and thoughtfully protect your confidential information. We are here to help, and look forward to sharing our experience and knowledge with you as we work diligently to produce smart and sensible legal solutions for your needs.