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LEGAL DICTIONARY

Confidentiality

Confidentiality is the act of non-divulgence of personal, private, or secret information that has been made available to you. It is both an ethical and legal consideration that you may come across when signing contracts and preparing legal documents.

There are many ways that confidentiality can be facilitated in legal agreements. This article looks at some of the forms of privacy accords that can be made and how these might appear in an essential legal contract or form.

Types of Confidentiality

Confidentiality has legal validity in many different fields. However, it is mostly used in medical, legal, and business settings. The most common types of confidentiality you will normally encounter are as follows:

  • Doctor-patient confidentiality
  • Attorney-client confidentiality
  • Contractual confidentiality (such as those found in contracts and NDAs)

There are some limits to confidentiality, however. For example, it cannot be used as protection if a clause or agreement is designed to avoid the disclosure of any illegal activity that has taken place.

Additionally, confidentiality agreements and protections cannot be used to litigate against information that is already in the public domain. Therefore, if the information is shared by any other means outside the control of the person bound to confidentiality, it will nullify any existing privacy accords that remain in force.

Confidentiality Clauses and Confidentiality Statements

When writing contracts and NDAs for business it may be necessary to create special confidentiality clauses or confidentiality statements.

This might occur when working with private data or secret information that must be shared to allow an independent contractor agreement to function. Alternatively, these extra details are essential when drawing up a contract where you will partner up or work closely with another business.

Confidentiality statements and clauses are short declarations that are included in contracts and non-disclosure agreements, that become legally binding once the agreement is signed. They ensure that the partnering party can only use the confidential information in ways specified in the contract and makes it clear that they may not share the data with anyone else.

These legal instruments have many advantages such as:

  • Making responsibilities clear on data handling for each party
  • Protecting important rights such as patents and trademarks
  • Allowing companies to share private information for important business purposes such as mergers, acquisitions, and when working with external consultants.
  • To protect business interests from being shared widely in the public domain

In most cases, companies use confidentiality tools such as NDAs and confidentiality statements in contracts to allow them to securely share their data without the risk of misuse or undermining a competitive advantage. This allows greater opportunities to improve their services and offerings to the market.

Confidentiality is a highly important subject to consider when preparing to share information or data with another party outside your business or organization. With the right protections however, it is possible to divulge these protected details safely and with legally binding safeguards.