Sharing your confidential information? Consider a Confidentiality Deed to protect yourself

Entering into a Confidentiality Deed is essential when you are sharing your sensitive business information, including in the following circumstances:

• during discussions about new business opportunities;
• during tender processes or negotiations for procurement agreements; or
• when exploring potential mergers and acquisitions.

A Confidentiality Deed should clearly define what information is protected, outline the limited circumstances the information can be used, specify the obligations to safeguard the information and include remedies for any breach.

If you are planning to disclose confidential information to a third party, contact us to ensure you are properly protected.

We have set out further detail on the benefits and uses of Confidentiality Deeds below.

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Confidentiality Deeds play a crucial role in protecting the confidentiality of sensitive commercial information. If you are embarking on discussions with a third party about a new business opportunity, procurement agreement or exploring a potential sale or purchase of a business, you are likely going to be sharing confidential information with that party that could have consequences for you if it got into the wrong hands or was used opportunistically or maliciously.

You should ensure that you put in place safeguards before you share any such information with a third party to protect your information from misuse and to give you recourse against them in the event that things go wrong.

One way you can do this is by requiring a third party to sign a Confidentiality Deed before you share any confidential information with them. A Confidentiality Deed sets out the ways in which the confidential information may lawfully be used and outlines the legal remedies available to you in the event the information is misused.

To ensure a confidentiality deed is effective in protecting your information and enforceable, some of the key provisions that should be clearly articulated include:

1. Parties: The Deed should clearly define the parties that are bound by the Deed, including who is disclosing the information, who is receiving it and whether it covers employees, contractors and agents of either party;
2. Confidential Information: The deed should include a definition of “Confidential Information” which clearly outlines what information will be shared and protected under the Deed;
3. Permitted Use: The Deed should set out the use that the recipient is permitted to make of the confidential information.  For example, if the information is being shared for the purpose of exploring and negotiating a sale of a business or allowing a third party to respond to a tender then the Deed should make clear that this is the permitted use of the information (and that any other use of the information would be a breach of the Deed);
4. Obligations: The Deed should set out the positive obligations placed on the recipient to maintain the confidentiality of the information, appropriately store and protect that information and notify you in the event that they become aware that the information has been misused; and
5. Remedies: The Deed should set out the legal remedies available to you in the event the confidential information is misused.

Parties to a proposed transaction or business venture should consider entering into a Confidentiality Deed prior to sharing any confidential information to ensure the commercial value of their sensitive information is preserved.

We can help you

If you would like to learn more about protecting the confidentiality of your sensitive information, need assistance with preparing a Confidentiality Deed or reviewing a Deed you have been asked to sign or if you have any questions regarding the above, please call 1800 867 113, or to organise a confidential discussion at a time that suits you, please click here