If you have never crafted a confidentiality agreement template before, you may be feeling a bit intimidated. However, like other business agreements, confidentiality agreements can be as straightforward or as complicated as you want them to be, depending on your specific situation.
Here is a closer look at what a confidentiality agreement is, what types of business relationships require them, and best practices for executing a successful confidentiality agreement between two parties.
Here’s a sample Confidentiality Agreement template that can be easily customized and adapted to meet your requirements. It’s free to download and use.
What is a confidentiality agreement template?
A confidentiality agreement is a formal agreement made between two parties where the ‘receiving’ party agrees to keep certain information about an organization or individual confidential.
Information deemed to be confidential can be anything that the initiating party wants it to be, and that information is typically clearly outlined in the agreement. This could include any information or data related to clients, industry secrets, business processes, product development insights, financial records, or anything else that the creator of the agreement wants to remain confidential.
This agreement establishes a mutual foundation of trust between the two parties, and it also gives the initiating party a sense of security that their business or personal information will not be leaked to the public.
What Types of Business Relationships Require a Confidentiality Agreement Template?
Anyone can create a confidentiality agreement for any reason, however, there are a handful of common scenarios where a confidential agreement is almost always required.
Employer and Employee
One of the most common reasons to need an employee confidentiality agreement template is for the employer/employee relationship. Employees are often privy to confidential information related to clients or customers, and they must keep this information private as a courtesy to both their employers and to the clients.
Partnership between company founders or inventors
This is another scenario where a confidentiality agreement template for free may come in handy. When two founders or inventors get together to start a company or launch a product, both parties will want to protect their interests in the event that things go sour. To avoid potential lawsuits, both parties need to clearly define what information should be kept confidential both during and after the relationship has ended.
Company and Contractor or Freelancer
When a company hires an external contractor or freelancer, they will not have to sign an employment confidentiality agreement template. However, company’s can still protect their interests by having these individuals or agencies agree to a confidentiality agreement. In this scenario, it is best for the company to have an idea of what information they want to keep private, for how long, and what the consequences are if the contract is breached.
Best Practices for Using Your Confidentiality Agreement Template
Downloading and filling out a simple confidentiality agreement template word is the easy part. However, negotiating the agreement and making sure that both parties understand it can be difficult! Here are some best practices for making sure that you get the most out of your confidentiality agreement template:
- Clearly define what you consider to be “confidential” – this may seem simple, but more often than not the receiving party discloses confidential information without even knowing that it is confidential! Make things easy for them by clearly outline what exactly you consider to be confidential so that there can be no confusion.
- Give recipients time to understand the agreement – Confidentiality agreements can be awkward and in some cases, the receiving party may be offended that you do not take them at their word. If you are initiating a contract, be respectful of this and give them time to read and understand the agreement, while also outlining the benefits of the agreement for both parties.
- Update your template as your business changes – The business environment can change so fast, so always remember to update your template as your needs change. Definitions for things like “data” and “intellectual property” are ever-evolving and it’s important to remain flexible and vigilant in protecting your confidential information.