These agreements are also notoriously difficult to enforce.
Used in the right circumstances, however, confidentiality agreements impose a powerful psychological restraint on those receiving confidential information. When negotiated well, they are also a way of making the receiving party feel an active participant in an exciting new venture.
In general, confidentiality agreements act more as ethical restraints than legal ones. As a result, intent is more important than specific wording.
Good confidentiality agreements have specific goals and milestones for both parties to achieve.
Issues to be considered when drafting a confidentiality agreement include:
- A unilateral or bilateral agreement
- The purpose of the agreement
- Defining what is confidential and what is not
- The term of the agreement
- How the recipient can use the confidential information
- Protection from unauthorised disclosure of the confidential information
