A Brief Introduction About the Confidentiality Agreement
A Confidentiality Agreement is a legal document that is created between two or more parties when they are engaging in a collaborative project, the details, and specifications of which needs to be kept confidential. The creation of this document allows both parties to share trade secrets, employees, workforce, and work products while minimizing the chances of risk from either party.
Who Takes the Confidentiality Agreement? – People Involved
This agreement is created between two or more parties. The first part is the one who is engaging in a collaborative project with the second party. In legal terminology, the first party is known as the Disclosing Party, and the second party is known as the Receiving Party. The agreement outlines the terms and conditions, rights, limitations, and duties of all the stakeholders.
Purpose of the Confidentiality Agreement – Why Do You Need It?
The primary purpose of this agreement is to establish a legal understanding between both the organizations and to ensure that the interests of the individual parties are protected.
Contents of the Confidentiality Agreement – Inclusions
Involved Parties: In this agreement, there are usually two parties involved; the primary being the who is engaging in a collaborative project and the second being the party with whom the project is being envisioned. The first party is legally referred to as the Disclosing Party, the latter as the Receiving Party, and the agreement is referred to as the Non-Disclosure and or Confidentiality Agreement.
Effective Date: This section of the agreement outlines the date from which this contract will stand legally binding and also the time on which the same can be dissolved.
Application: This contract constitutionally is applicable within the boundaries of the state, city, or county where it was initially drawn.
How to Draft the Confidentiality Agreement?
This agreement can be drafted by merely following the steps mentioned below.
Organize a meeting for both the parties and discuss the terms and conditions of the agreement. Such as the details of the venture, the number of employees that are needed, the time for which the employees will be hired, the work material, the equipment, and, most importantly, the number of funds that will be invested for the same.
Once the primary and secondary parties have agreed to all the conditions, reach to the lawyer, and ask him to draw up an agreement according to the specifications discussed.
Both parties need to sign the contract and register in the house of law.
While negotiating the formation of this agreement, it must be taken care that the individual interests of both parties must be addressed along with the common cause.
Benefits & Drawbacks of the Confidentiality Agreement
The most significant benefits of having this agreement are as follows.
Benefits of Having a Confidentiality Agreement
The contract clearly states all the responsibilities and limitations which ensure the people involved are well informed all the time.
This document is a legal proof and can be produced in court if need be.
Cons of Not Having a Confidentiality Agreement
In the absence of an agreement, neither of the parties have legal proof of an understanding taking place between two entities, and thus if the matter is ever brought to court, both parties stand to lose.
What Happens In Case of Violation?
In the case of violation(1) of a Confidentiality Agreement, specific remedies come into effect, and in some instances, the contract is dissolved, and a new set of terms and conditions are agreed upon.
A Confidentiality Agreement is created to mitigate the risk of a dispute(2), hassles, and any confusion that might arise in the future. Thus it is always suggested that tenants and individuals create a Confidentiality Agreement when there is a need for subletting a property and or real estate.