Non-Disclosure Agreements vs. Confidentiality Agreements

 

If you have done any research online or talked to anyone about Confidentially Agreements, you will likely have heard of Non-Disclosure agreements. In fact, celebrities are known for using these “Non-Disclosure Agreements”, or NDA when hosting private parties where they don’t want the guests disclosing anything they saw or did at the party. Now I know that’s a little different then the business purposes we will be discussing here, but hey, it may help you remember the difference! The goal is protecting private information from the general public.

So the name itself is self-explanatory but let’s start off by defining each below.

What is a Non-Disclosure agreement?

A Non-Disclosure agreement is used anytime you want to share valuable information with another individual or business regarding your business relationship and without worry that the information will be copied, shared or stolen.

What is a Confidentiality agreement?

A Confidentiality Agreement protects the intellectual property. There are many assets to protect including your inventions, processes, clients and financial information. This internal information is best protected by having some kind of disclosure agreement.

So what is the difference?

Both of these documents are often times used interchangeably and may even contain both names in one document, for example “Confidential Non-Disclosure Agreement”. So how do you know which document is the best to use for your situation?

A good rule of thumb is to think about whether you are trying to protect internal information, or trying to protect information from being shared with another party regarding a specific business purpose.

The good news is that they both offer protection and it would be a good idea to have one option over none. Below I am including a bullet point list that further breaks down the very small difference between the two:

Non-Disclosure or Mutual Non-Disclosure Agreement

  1. Usually in unilateral agreements;

  2. Terminology most often used in the U.S.;

  3. Usually signed by two equal parties; and

  4. Protects personal or private information — mere disclosure prevention.

Confidentiality Disclosure Agreement

  1. Usually in bilateral or multilateral agreements;

  2. Terminology most often used in U.K. and Australia;

  3. Usually between employers and their employees; and

  4. Heightened degree of security and secrecy

Having something in place to protect you and your business is crucial for the longevity and success of your brand. It’s important to partner with people and leverage your Company, however, you want to do this carefully and with contracts in place to protect you.

My law office has both of these contract templates available for purchase on our site here!

And there you have it, a quick overview of the difference between these two very important contractual agreements. Have any questions or comments? Leave them below.

With LOVE,

KayaDejure

 
Kiara MarieComment