Small Business Glossary and Definitions

A Confidentiality Agreement is a legal agreement between two or more parties that establishes confidential knowledge, information or material that is to be shared among the parties to the agreement but with no one else.

It also is called a non-disclosure agreement, confidential disclosure agreement, confidentiality agreement, a secrecy agreement or a proprietary information agreement. The agreement creates a private relationship to guard trade secrets and other confidential information.

Such agreements typically are signed when two sides are evaluating conducting business together and have to understand each other’s processes to see if the relationship will work. They can restrict one or both parties to the agreement. Employees also often sign these agreements (or they are included as a clause in an employment contract that prohibits using or distributing confidential company information.