A confidentiality statement is a legal agreement between two or more parties, which shows a confidential relationship exists between the parties involved in the agreement. The confidentiality agreement is usually signed before disclosing particular confidential information to the parties involved.
The confidentiality statement also helps an individual to protect an invention or idea when seeking partnership with a marketing firm, manufacturer or sponsor. The business idea or invention remains a secret to prevent it from leaking to the public or potential competitors. Some businesses also provide confidentiality statements to their employees to protect the financial information or trade secrets of that particular business.
A confidentiality statement falls into two categories: the unilateral confidentiality statement and the mutual confidentiality statement. The parties involved sign a unilateral confidentiality statement when only one party is disclosing confidential information. The mutual confidential statement applies when both parties disclose confidential information.
The statement specifies the exact confidential information in the agreement, such as business practices, client lists, schematic drawings, sales data or vendor information. However, the agreement can include a deadline from which point particular information is no longer considered confidential. Some parties take legal actions against members who violate the confidentiality agreement, as long as the agreement abides by the state laws.