A confidentiality agreement, also known as a non-disclosure agreement, is becoming increasingly common in the world of work: it is an agreement by which the signatory undertakes not to disseminate sensitive information (e.g. commercial or industrial secrets) which may come to his attention in the course of his professional activity.
More and more companies are offering such agreements to protect themselves, starting with the job interview: this is why it is essential to understand how they work, when to sign them and how to do so online.
What is a confidentiality agreement?
The Non-Disclosure Agreement (NDA) is a legally binding contract in which one party guarantees non-disclosure of confidential information it has learned about the other party.
In the professional context in particular, it provides for an undertaking by all parties involved to maintain the confidentiality of negotiations, for example, but more generally of all information of which both parties become aware.
Such an agreement covers all confidential information, i.e. information that must remain secret and whose disclosure could harm the company or the professional.
This often includes intangible assets such as know-how, knowledge, trade secrets, economic data, business plans, patents and unregistered trademarks.
Why is it essential to have a confidentiality agreement signed?
This makes it possible to assert an intellectual property right, particularly on information protected by industrial and commercial secrecy. To be effective, a confidentiality agreement must provide for penalties in the event of a breach.
In order to assert one's rights following a breach, it is essential to be able to prove that all the necessary measures have been implemented to preserve the confidentiality of the information that has been improperly disclosed.
Once both parties have defined precisely what information is to be kept confidential, the agreement should detail the framework for the use of that information. Any use of the information other than as agreed by both parties is designated as unlawful.
How to sign a confidentiality agreement?
The use of pre-filled templates available on the Internet is widespread, but not recommended.
These templates are often generic and contain extensive descriptions of confidential information and overly detailed lists of the company's entire business, with the risk of being irrelevant to the agreement in question or, on the contrary, of excluding the very information we are interested in.
☝️ The following should be included in any confidentiality agreement :
- parties: the parties to the agreement must be defined. The obligation of confidentiality may be incumbent on one or both parties;
- purpose: describes in as much detail as possible the information that will be communicated and subject to the confidentiality obligation. Similarly, it should be specified in which cases the limitations on the use of confidential data will not apply:
✔ if the recipient already knows the information ;
✔ if the beneficiary has obtained the information from another source;
✔ if the information is publicly available;
✔ if the information was obtained illegally;
✔ if the information is subject to a court order. In any case, a court order should certainly prevail over any type of contract;
- framework: the framework for the communication of undisclosed confidential information, the use of which outside the framework is prohibited;
- duration of the confidentiality obligation: it may have a deadline or be open-ended;
- a penalty clause for breach of the non-disclosure obligation. The amount of the penalty should be defined by calculating the damage caused to the company in the event of disclosure of the information;
- competent court in case of dispute ;
- applicable law if the agreement involves parties residing in different countries.
If it is planned to communicate personal data, it is necessary to add also the clause imposing compliance with the RGPD and the possible appointment of the external processor specifying also the purposes of the data processing.
Confidentiality agreement: the signing stage
Once the agreement has been drafted and agreed by both parties, there is one last key step: signing.
And, in a context still marked by the covid-19 pandemic, the dematerialisation of business processes is still a priority to guarantee business continuity in a secure and efficient manner.
Why sign with Yousign?
This is how Yousign's electronic signature can become your ally for confidentiality agreements: it helps you gain efficiency and ensures the traceability of confidential documents.
Not to mention that when a company is dealing with a confidentiality agreement, the handwritten signature system can be complex, expensive and time consuming!
It also involves risks related to :
- the type of document concerned
- the knowledge of the information it contains, which may be subject to illicit use or, in the most extreme cases, manipulation and breach of confidentiality.
Thanks to Yousign's electronic signature service, the process is smoother and undeniably more secure: for confidentiality agreements, the use of an electronic signature system is indeed highly recommended since this type of signature allows the identification of the beneficiary and the association with the data signed by him.
By dematerialising the signing process, it is therefore also possible to monitor subsequent changes to the information in real time, thereby better protecting the agreement.