Confidentiality agreement: what it can and cannot protect

A confidentiality agreement sets out what information is being shared, what the recipient may do with it, and for how long. It is the most routinely signed commercial document and among the least often read, which is unfortunate, because the clauses that decide whether it protects anything are the ones most people skip.

What a confidentiality agreement must define

• What counts as confidential: everything shared, or only what is marked — and marking requirements are useless if nobody marks anything.
• The permitted purpose, which should be narrow and specific rather than «evaluating a relationship».
• Who the recipient may share it with: employees, advisers, group companies, and on what terms.
• Duration, both of the agreement and of the obligation, which are different and often confused.
• What is excluded — information already known, independently developed, or publicly available.
• What happens at the end: return, destruction, or retention for compliance with an exception for backups.

Mutual or one way

One-way agreements make sense when only one side is disclosing. The moment both parties are sharing anything — and in most commercial discussions both are, even if unevenly — a mutual agreement is simpler and faster to agree than arguing about whose template to use. The practical signal is this: if the other side pushes hard for a one-way agreement in their favour during a conversation that is obviously two-sided, that is information about how the rest of the relationship will be negotiated.

An agreement cannot stop information from spreading; it can only give you a remedy afterwards. That remedy requires proving what was disclosed, when, and what harm followed — which is far easier when you kept a record of exactly what you sent and on what date, and nearly impossible when you did not.

Why most are signed and never used

1. Nobody records what was actually disclosed under it, so a later claim has no boundary.
2. The permitted purpose is drafted so broadly that almost any use fits within it.
3. The duration expired years before anybody checked.
4. The real risk was somebody's memory and judgement, which no agreement restrains.
5. Enforcement is slow and public, and most businesses decide the remedy costs more than the harm.
6. Treat it as the floor rather than the plan: share less, share later, and share with fewer people, because that does more work than the clause does.

Ettex Sign handles the signing itself with the date and the parties recorded, which is the easy half. The harder half — a record of what was disclosed under which agreement and when — belongs wherever you keep the agreement, and it is the part that turns a signed document into something you could actually rely on.