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What Is a Confidentiality Clause?

Some agreements, ideas, processes, or other forms of classified information are revealed to certain individuals who are in positions of authority or are in possession of qualities or skills that make it necessary for them to know such confidential matters. In order to ensure that such information is not disclosed to the public or to certain individuals, a binding agreement involving a confidentiality clause is entered into by those who are privy to such information.

A confidentiality clause is the most crucial provision in a non-disclosure agreement or confidentiality agreement. It provides that the individual who enters into it with another must not disclose certain pieces of information that he or she has been given access to without the consent of the individual who has granted access to it. A breach of this agreement may result in payment of damages or some other form of restitution.

The use of a confidentiality clause may differ among industries and other areas of business. A celebrity or high-profile individual may ensure that the details of his or her private life are kept private by entering into an agreement with a confidentiality clause with an assistant. Businesses may protect their trade secret by ensuring that all their employees agree to a confidentiality clause so that any subsequent termination of employment will not result into the disclosure of such sensitive information. A confidentiality clause used in such cases are done to provide a legal and financial incentive to those who may divulge significant objective information.

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