Confidentiality agreement: supplier, contractor or consultant
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About this document
Use this non-disclosure agreement for situations where a contractor, consultant or supplier will learn sensitive information during their service for you.
The sensitive information may be directly related to the service the other party is carrying out (for example, a management consultant may need to know directors' salaries, or a parts supplier might need to know exactly what you are manufacturing with the machine) or the other party may find out in the course of providing the service (for example, IT contractors may find out the identities of some of your clients as they fix a computer or a builder might find out how your security system works).
You can use this document to prevent the contractor or supplier from acting on the information and thus you can help protect your personal or business information or ideas.
Signing an agreement also reminds the other party that the information is sensitive, preventing them from claiming ignorance of its value to you. Of course total secrecy is best. But there are many occasions in life when secrets need to be disclosed, or might be found out.
This NDA is drawn broadly to cover all information passing to the other party, but in a way that enables you to insert your own precise secrets if you want to specify them.
The document gives you choices as to how you want the recipient of your information to deal with it. You may limit disclosure to the person who signs the agreement or you may allow him to pass the information to other professional advisers or employees or consultants.
Points to consider in how you manage confidentiality and non-disclosure
A non-disclosure agreement is, for all purposes, a different name for a confidentiality agreement. “Non-disclosure” is more commonly used in the USA and tends to suggest protection against passing-on of information alone rather than use of the information as well. “Confidentiality” is the British equivalent. In the UK, either label is acceptable in law: what matters is the content.
The law in this agreement is basic contract law. It is strong and clear.
You should recognise that all the legal agreements in the world cannot prevent accidental or unintentional disclosure (for example, careless talk over a drink with a friend, or when leaving your documents out for public rubbish collection). A good contract (like this one) should therefore also cover what happens if the information is used or disclosed.
You can also manage risks by limiting the information that you disclose, and the people who know about it. Both these things are covered by this NDA. Both individuals and business owners tend to be most diffident about asking for a non-disclosure agreement from people they “trust” with their ideas, but who have no obligation to keep confidentiality (for example, friends, relatives, potential investors, partners and customers). This is a great mistake. The upside of protection from insisting on an agreement far outweighs the downside of loss of private data.
When to use this document
This agreement is about how sensitive information will be kept confidential. The actual nature and subject of the information is not important to agreement of how it will be used. Therefore, there are many situations in which this document can be used.
Either party can initiate use of a the agreement. If you are the receiver of information, you can make the other side at ease by suggesting the use of one before they do.
The NDA should be signed before information is disclosed.
The agreement should be used when a service provider, contractor or consultant may require or find out sensitive information in the course of acting for you. It could be used supplementary to an employment contract, but only if the employment contract does not cover confidentiality already.
Examples of use could be when:
- You are hiring a business adviser on non-employment basis
- A supplier will need to become involved in your business or personal affairs (perhaps in order to deliver the service or goods)
Similar versions of this document
Net Lawman also sells similar agreements for slightly different circumstances:
If only one party is disclosing information to others, see our standard, vanilla agreement.
If two or more parties are disclosing information to each other, use a mutual agreement.
If you are a creator of an artistic work or intellectual property who wishes to show it to a third party for assessment with a view to sale, publication, manufacture or use, then this agreement specifically protects created work, expanding on copyright protection.
Document features and contents
- Either or both parties can be individuals or businesses
- Fast to put in place: guidance notes make completion easy
- Provides strong legal protection
- Can be used to protect defined information, or generally
- The subject and nature of the information being kept confidential can be anything
The paragraphs include:
- Definition of the confidential information: can be as broad or specific as you like
- Excluded information
- Publicity: flexibility to allow publicity about the work being carried out
- Security of disclosed information: how information must be kept and stored
- Data Protection: compliance with DP Act 1988
- Ownership and warranty
- Undertakings not to steal customers and staff
- Other legal provisions to protect your interests
This document was written by a solicitor for Net Lawman. It complies with current English law.
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