Understanding the Benefit of a Confidentiality Agreement Form

All businesses want to protect their sensitive information and data. They do not want unauthorized people or outsiders to find out this information, as it could be used against them or offer leverage to their competitors. While businesses need to share some amount of data or information with their service providers, they can ensure a smooth working relationship by getting their service providers to sign a confidentiality agreement.

Signing the Agreement

When you hire a service provider, you definitely will have to share some information related to your business. The information shared will primarily depend on the type of service you intend outsourcing. Under such circumstances, you can draft an agreement that lists down the how the service provider may or may not use the information provided to them.

Some organizations also require their own employees to sign a confidentiality agreement wherein they clearly highlight that business critical data and information cannot be used for personal benefits, leaking to media or unlawful activities.

Many people confuse this agreement with a non-disclosure agreement and use the terms interchangeably. While there are similarities between the two and both aim to protect confidential information and intellectual property, the difference lies in the penalties that the organization can impose when confidential information is divulged. Typically, companies impose more serious penalties for breach of confidentiality agreements and the penalties can be a lawsuit seeking substantial damages or jail time.

Using Confidentiality Agreement Form

Thanks to the advent of Internet, organizations can get industry-specific confidentiality agreement forms rather easily. These forms usually contain all the required terms and conditions related to the business and make sure that the privacy of the business is maintained and honored.

Using a confidentiality agreement form makes it easy to list down the ways that the sensitive information and data can be used and also the ways it cannot be used. You can even customize the form further to meet your specific needs and this ends up saving a lot of time and energy, as there is no need for the organization to draft the agreement from scratch. It makes the person creating the forms more productive.

It is also important to remember that once the agreement has been signed by both parties, it becomes a legally binding agreement. If a dispute arises, either party can present the agreement in a court of law.  This type of agreement can help organizations protect their business critical data and trade secrets in a highly competitive market and that is why these agreements have become very popular today.

Author’s Bio:

Mark Smith is a legal advisor, and comes across many people who are flummoxed by the intricacies of the different laws. He is of the belief that there is no substitute to thorough information, and the one who is informed will never lose his/her way. These posts are a part of his initiative of disseminating legal knowledge among common masses.