confidentiality
Definition
Confidentiality is a legal obligation that requires one or both parties to keep certain information private and not share it with outsiders. When you sign a confidentiality agreement, you are promising to treat specific information as a secret and protect it from being disclosed to people who are not authorized to know it. Breaking this promise can expose you to lawsuits and financial damages.
Example
If you hire a software contractor and share your proprietary code with them, a confidentiality agreement prevents them from sharing that code with your competitors or using it to build a competing product.
Watch Out
Make sure any confidentiality agreement clearly spells out exactly what information is considered confidential, because vague agreements are hard to enforce when something goes wrong.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.