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The silent service – how effective are your confidentiality agreements?

The Royal Navy’s submarine service is often referred to as the silent service. Given the nature of that work, it is self-evident how important it is for submariners to remain silent. In the commercial world, every business has confidential information which needs to be protected lest the hull of the business be breached with catastrophic results for the business vessel.

Businesses often come across projects where it is necessary for them to consider disclosing confidential information to employees, contractors or other third parties (For instance, selling the business or entering into a joint venture).

Most business will know that before disclosing any confidential information they should enter into a confidentiality agreement. The intention of such an agreement is to prevent someone from unfairly benefitting from your confidential information or disclosing it without your consent.   June contract

Given the importance of confidentiality agreements it is surprising how often the terms of such agreements are not considered, for instance:

  1. How is “Confidential Information” defined?
  2. What information excluded from this definition?
  3. What can the disclosed information be used for?
  4. Can the recipient pass the information to other parties (for example, bankers, lawyers and/or accountants)?
  5. What level of security must the receiving party put in place to protect the information?
  6. Is there to be a time limit on obligations?
  7. What obligations are imposed requiring return and destruction of confidential information?

In addition to the black and white of the agreement, a business also needs to consider:

  1. Who am I disclosing to? This may have an obvious answer but, when dealing with group companies, this can be a very important question which is crucial to the drafting and effectiveness of the agreement;
  2. Have I performed enough due diligence? You need to know the recipient is trustworthy and has the awareness and ability to protect anything you are disclosing;
  3. Are my procedures and training sufficient to allow my staff and advisors to manage the confidential information required to be disclosed under this project?

If you have any questions regarding confidentiality agreements, please talk to our confidentiality agreements advisor, Steven Wicks, on 01383 745799 (or by email on saw@businesslaw.co.uk), or one of the other members of the corporate team:

Alan D Stalker WS ads@businesslaw.co.uk 01383 745789

Angus McGuire alm@businesslaw.co.uk 01383 721621

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