obligation of confidentiality
Definition
An obligation of confidentiality is a legal duty that requires a person or business to keep certain information private and not share it with others. This duty can come from a written contract, like a non-disclosure agreement, or it can arise automatically from the nature of a business relationship. Breaking this obligation can expose you to a lawsuit and serious financial penalties.
Example
If you hire a consultant and share your customer list or trade secrets with them, they carry an obligation of confidentiality to never share or use that information outside of their work for you.
Watch Out
Even without a signed contract, courts can sometimes find that an implied obligation of confidentiality exists based on how two parties conducted business together, so be careful about what sensitive information you share and with whom.
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.