What Is “breach of Confidentiality”?

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A breach of confidentiality is a disclosure of confidential information. Whether a breach of confidentiality exists depends upon the definition of confidential information in a contract. Many contracts define confidential information as all information not readily available to the public. This information includes customer lists, suppliers, product schematics and pricing.

Without a contract, there is usually no obligation to keep information confidential, unless the disclosing party owes a fiduciary obligation to the other party. For example, a board member of a company has a fiduciary obligation not to disclose the company’s confidential information. A breach of confidentiality by a board member is regarded as more serious when the board member personally benefits from the disclosure of confidential information.

Further, there are certain privileged situations that are protected by law. Depending on the jurisdiction, communication between doctors, lawyers, accountants, psychologists and their clients is privileged and confidential.

Because health care is a sensitive area, the U.S. Congress designed special rules in the Health Insurance Portability & Accountability Act to ensure that there are special protections for the transfer of medical information between health care providers.

Absent a unique relationship between the two parties, the language of the contract determines what information is confidential. Any disclosure of confidential information as defined in the contract is considered a breach.