How to Negotiate Confidentiality Agreements

Business owners can have employees sign confidentiality agreements.

In business, there are a lot of different types of contracts and agreements that you have to draft, negotiate and then sign with another party. One such document is a confidentiality agreement, also known as non-disclosure agreements. This type of agreement is basically used when one party, usually a company, is going to be giving confidential information to another party, usually an employee or another company. The document states that the third party will keep the information given confidential, and the terms can generally be negotiated.

Instructions

1. Ask that the consideration be included in the confidentiality agreement. The consideration is something that has value that both parties signing the document have to give. This makes the contract legal. Usually, the company is paying someone for services, and confidential information is needed to complete that service. The exchange of money and the service is the consideration for each party.

2. Reach an agreement on the definition of "confidential." This should be included in the contract. Generally, the company receiving the service will want a broader definition, but the person or company giving the service will want a more specific definition. One way to settle this is to include a definition that fits with the type of information being given, such as the company's financial report.

3. Decide the permitted and restricted uses for the confidential information and include that in the contract. Make sure both parties agree on all the different ways the information could be used. The agreement should clearly state that the person or company receiving the information agrees not to use it for any purpose not listed.

4. Discuss the requirements of each party. This should include the timeframe in which the company will be supplying the information and the payment being given for the service. The receiver's requirements usually involve delivering the service, steps taken to keep the information confidential, such as not making any copies, and in some cases, returning confidential information.

References

• JOM: Understanding Confidentiality Agreements
• All Business: Confidentiality and Nondisclosure Agreements