One of the first considerations with
any type of new venture is how to protect your business, valuable
idea or concept if you need to disclose it to others.
When is a confidentiality agreement needed?
If you need to disclose your
valuable business information or ideas to a potential partner,
adviser or investor then a confidentiality agreement is an
What is a confidentiality agreement?
Agreement" or a "Non-Disclosure Agreement" is a
legally binding contract which contains promises from the recipient
of the confidential information to limit the use of the information
to a specific purpose.
Confidentiality agreement tips
1. A confidentiality agreement must do three
define what information is "confidential
identify the specific purpose the for which information will be
restrict its disclosure and identify any permissible
2. The following statements should be included (if
disclosure is not intended to transfer any rights in such
there is no exclusivity granted to the recipient in the
there is no obligation on the discloser to provide confidential
the supply of confidential information does not constitute an
offer of any kind
no warranty is given about the accuracy or completeness of the
3. The following obligations should be imposed on the
the recipient must keep the information confidential
the recipient is responsible for any unauthorised
the recipient acknowledges that breach of the agreement may
cause loss to the discloser
the recipient indemnifies the discloser for any loss arising
from the recipient's breach of the agreement
the recipient must return all confidential information on
the recipient agrees not to solicit or approach employees,
customers or suppliers of the discloser or interfere with its
4. Other common terms which should be
the term of the agreement – how long the agreement
should be in force
governing law and jurisdiction – the laws of which
state or country should apply.
Swaab was recently named a 2009 Winner in the
ALB Employer of Choice awards, and was winner 'Best Law Firm in
Australia (Revenue < $20m)' and 'Attribute Award for
Exceptional Service (Australia Wide)'
in the 2008 BRW- Client Choice Awards.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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On 12th November 2016, new laws will commence to protect small businesses from unfair terms in standard form contracts.
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