Confidentiality Clause

A section within a larger contract that requires one or both parties to keep certain information secret. Unlike a standalone NDA, a confidentiality clause is embedded inside another agreement, a services contract, employment agreement, or partnership deal. It defines what counts as confidential, who can access it, and how long the obligation lasts.

You hire a development agency to build your product. The services agreement includes a confidentiality clause covering your source code, business plans, user data, and pricing strategy. Six months later, you discover the agency shared your architecture diagrams with another client building a competing product. The confidentiality clause gives you grounds to terminate the contract and sue for damages, without it, you'd be arguing implied duty, which is much harder to prove. Confidentiality clauses are in virtually every business contract. The key differences between a strong and weak clause: specificity about what's confidential, clear exclusions (publicly available info, independently developed material), defined duration, and spelled-out remedies for breach.

Each Party agrees to hold in strict confidence all Confidential Information received from the other Party and shall not disclose such information to any third party without prior written consent. 'Confidential Information' means all non-public information disclosed by either Party, whether orally, in writing, or electronically, that is designated as confidential or that reasonably should be understood to be confidential. This obligation shall survive termination of this Agreement for a period of three (3) years.