Question: When would I need a confidentiality agreement?Answer:
A confidentiality agreement, also known as a non-disclosure agreement, may be necessary when you wish to protect sensitive information relating to your business.
One situation where this might apply is when either buying or selling a business. In going through the due diligence process, information about the business such as its financial records and operating practices are released to the potential buyer. The seller will still want to keep this information confiential from the general public and may ask the buyer to sign a confidentiality agreement.
Another time a confidentiality agreement is commonly used is to prevent employees, consultants or contractors from revealing company practices, trade secrets, strategies, and from using their intellectual property. This may be paired with a non-compete agreement to prevent leaving employees from entering into or starting up a similar profession or trade that is in competition with their previous place of work.