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Confidentiality Agreement

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CONFIDENTIALITY AGREEMENT

THIS CONFIDENTIALITY AGREEMENT ("the Agreement") dated this ________ day of ________________, ________.

Employer

____________________ of ____________________________________________________________
(the "Employer")

Employee

____________________ of ____________________________________________________________
(the "Employee")

BACKGROUND:

  1. The Employee is currently or may be employed as an employee with the Employer for the position of: __________. In addition to this responsibility or position (the "Employment"), this Agreement also covers any position or responsibility now or later held with the Employer.
  2. The Employee will receive from the Employer, or develop on the behalf of the Employer, Confidential Information as a result of the Employment (the "Permitted Purpose").

IN CONSIDERATION OF and as a condition of the Employer employing the Employee and the Employer providing the Confidential Information to the Employee in addition to other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, the parties to this Agreement agree as follows:

  1. Confidential Information
  2. All written and oral information and materials disclosed or provided by the Employer to the Employee under this Agreement constitute Confidential Information regardless of whether such information was provided before or after the date of this Agreement or how it was provided to the Employee.
  3. The Employee acknowledges that in any position the Employee may hold, in and as a result of the Employee's employment by the Employer, the Employee will, or may, be making use of, acquiring or adding to information about certain matters and things which are confidential to the Employer and which information is the exclusive property of the Employer.
  4. 'Confidential Information' means all data and information relating to the business and management of the Employer, including but not limited to, the following:
    1. 'Business Operations' which includes internal personnel and financial information of the Employer, vendor names and other vendor information (including vendor characteristics, services and agreements), purchasing and internal cost information, internal services and operational manuals, external business contacts including those stored on social media accounts or other similar platforms or databases operated by the Employer, and the manner and methods of conducting the Employer's business;
    2. 'Customer Information' which includes names of customers of the Employer, their representatives, all customer contact information, contracts and their contents and parties, customer services, data provided by customers and the type, quantity and specifications of products and services purchased, leased, licensed or received by customers of the Employer;
    3. 'Intellectual Property' which includes information relating to the Employer's proprietary rights prior to any public disclosure of such information, including but not limited to the nature of the proprietary rights, production data, technical and engineering data, technical concepts, test data and test results, simulation results, the status and details of research and development of products and services, and information regarding acquiring, protecting, enforcing and licensing proprietary rights (including patents, copyrights and trade secrets);
    4. 'Service Information' which includes all data and information relating to the services provided by the Employer, including but not limited to, plans, schedules, manpower, inspection, and training information;
    5. 'Product Information' which includes all specifications for products of the Employer as well as work product resulting from or related to work or projects performed or to be performed for the Employer or for clients of the Employer, of any type or form in any stage of actual or anticipated research and development;
    6. 'Production Processes' which includes processes used in the creation, production and manufacturing of the work product of the Employer, including but not limited to, formulas, patterns, moulds, models, methods, techniques, specifications, processes, procedures, equipment, devices, programs, and designs;
    7. 'Accounting Information' which includes, without limitation, all financial statements, annual reports, balance sheets, company asset information, company liability information, revenue and expense reporting, profit and loss reporting, cash flow reporting, accounts receivable, accounts payable, inventory reporting, purchasing information and payroll information of the Employer;
    8. 'Marketing and Development Information' which includes marketing and development plans of the Employer, price and cost data, price and fee amounts, pricing and billing policies, quoting procedures, marketing techniques and methods of obtaining business, forecasts and forecast assumptions and volumes, and future plans and potential strategies of the Employer which have been or are being discussed;
    9. 'Computer Technology' which includes all scientific and technical information or material of the Employer, pertaining to any machine, appliance or process, including but not limited to, specifications, proposals, models, designs, formulas, test results and reports, analyses, simulation results, tables of operating conditions, materials, components, industrial skills, operating and testing procedures, shop practices, know-how and show-how;
    10. 'Proprietary Computer Code' which includes all sets of statements, instructions or programs of the Employer, whether in human readable or machine readable form, that are expressed, fixed, embodied or stored in any manner and that can be used directly or indirectly in a computer ('Computer Programs'); any report format, design or drawing created or produced by such Computer Programs; and all documentation, design specifications and charts, and operating procedures which support the Computer Programs; and
    11. Confidential Information will also include any information that has been disclosed by a third party to the Employer and is protected by a non-disclosure agreement entered into between the third party and the Employer.
  5. Confidential Information will not include the following information:
    1. Information that is generally known in the industry of the Employer;
    2. Information that is now or subsequently becomes generally available to the public through no wrongful act of the Employee;
    3. Information rightly in the possession of the Employee prior to receiving the Confidential Information from the Employer;
    4. Information that is independently created by the Employee without direct or indirect use of the Confidential Information; or
    5. Information that the Employee rightfully obtains from a third party who has the right to transfer or disclose it.
  6. Confidential Obligations
  7. Except as otherwise provided in this Agreement, the Employee must keep the Confidential Information confidential.
  8. Except as otherwise provided in this Agreement, the Confidential Information will remain the exclusive property of the Employer and will only be used by the Employee for the Permitted Purpose. The Employee will not use the Confidential Information for any purpose that might be directly or indirectly detrimental to the Employer or any associated affiliates or subsidiaries.
  9. The obligations to ensure and protect the confidentiality of the Confidential Information imposed on the Employee in this Agreement and any obligations to provide notice under this Agreement will survive the expiration or termination, as the case may be, of this Agreement and those obligations will last indefinitely.
  10. The Employee may disclose any of the Confidential Information:
    1. to such agents, representatives and advisors of the Employee that have a need to know for the Permitted Purpose provided that:
      1. the Employee has informed such personnel of the confidential nature of the Confidential Information;
      2. such personnel agree to be legally bound to the same burdens of confidentiality and non-use as the Employee;
      3. the Employee agrees to take all necessary steps to ensure that the terms of this Agreement are not violated by such personnel; and
      4. the Employee agrees to be responsible for and indemnify the Employer for any breach of this Agreement by their personnel.
    2. to a third party where the Employer has consented in writing to such disclosure; and
    3. to the extent required by law or by the request or requirement of any judicial, legislative, administrative or other governmental body.
  11. Avoiding Conflict of Opportunities
  12. It is understood and agreed that any business opportunity relating to or similar to the Employer's current or anticipated business opportunities coming to the attention of the Employee during the Employee's employment is an opportunity belonging to the Employer. Accordingly, the Employee will advise the Employer of the opportunity and cannot pursue the opportunity, directly or indirectly, without the written consent of the Employer.
  13. Without the written consent of the Employer, the Employee further agrees not to directly or indirectly, engage or participate in any other business activities which the Employer, in its reasonable discretion, determines to be in conflict with the best interests of the Employer.
  14. Ownership and Title
  15. The Employee acknowledges and agrees that all rights, title and interest in any Confidential Information will remain the exclusive property of the Employer. Accordingly, the Employee specifically agrees and acknowledges that the Employee will have no interest in the Confidential Information, including, without limitation, no interest in know-how, copyright, trade mark or trade names, notwithstanding the fact that the Employee may have created or contributed to the creation of that Confidential Information.
  16. The Employee does hereby waive any moral rights that the Employee may have with respect to the Confidential Information.
  17. The Confidential Information will not include anything developed or produced by the Employee during the term of this Agreement, including but not limited to intellectual property, process, design, development, creation, research, invention, know-how, trade name, trade mark or copyright that:
    1. was developed without the use of any equipment, supplies, facility or Confidential Information of the Employer;
    2. was developed entirely on the Employee's own time;
    3. does not relate to the actual business or reasonably anticipated business of the Employer;
    4. does not relate to the actual or demonstrably anticipated processes, research, or development of the Employer; and
    5. does not result from any work performed by the Employee for the Employer.
  18. The Employee agrees to immediately disclose to the Employer all Confidential Information developed in whole or in part by the Employee during the term of the Employment and to assign to the Employer any right, title or interest the Employee may have in the Confidential Information. The Employee agrees to execute any instruments and to do all other things reasonably requested by the Employer (both during and after the term of the Employment) in order to vest more fully in the Employer all ownership rights in those items transferred by the Employee to the Employer.
  19. Remedies
  20. The Employee agrees and acknowledges that the Confidential Information is of a proprietary and confidential nature and that any failure to maintain the confidentiality of the Confidential Information in breach of this Agreement cannot be reasonably or adequately compensated for in money damages and would cause irreparable injury to the Employer. Accordingly, the Employee agrees that the Employer is entitled to, in addition to all other rights and remedies available to it at law or in equity, an injunction restraining the Employee and any agents of the Employee, from directly or indirectly committing or engaging in any act restricted by this Agreement in relation to the Confidential Information.
  21. Return of Confidential Information
  22. The Employee agrees that, upon request of the Employer, or in the event that the Employee ceases to require use of the Confidential Information, or upon expiration or termination of this Agreement, or the expiration or termination of the Employment, the Employee will turn over to the Employer all documents, disks or other computer media, or other material in the possession or control of the Employee that:
    1. may contain or be derived from ideas, concepts, creations, or trade secrets and other proprietary and Confidential Information as defined in this Agreement; or
    2. is connected with or derived from the Employee's services to the Employer.
  23. Notices
  24. In the event that the Employee is required in a civil, criminal or regulatory proceeding to disclose any part of the Confidential Information, the Employee will give to the Employer prompt written notice of such request so the Employer may seek an appropriate remedy or alternatively to waive the Employee's compliance with the provisions of this Agreement in regards to the request.
  25. If the Employee loses or fails to maintain the confidentiality of any of the Confidential Information in breach of this Agreement, the Employee will immediately notify the Employer and take all reasonable steps necessary to retrieve the lost or improperly disclosed Confidential Information.
  26. Any notices or delivery required in this Agreement will be deemed completed when hand-delivered, delivered by agent, or seven days after being placed in the post, postage prepaid, to the parties at the addresses contained in this Agreement or as the parties may later designate in writing.
  27. The addresses for any notice to be delivered to any of the parties to this Agreement are as follows:
    1. Name: ____________________
      Address: ____________________________________________________________

    2. Name: ____________________
      Address: ____________________________________________________________

  28. Representations
  29. In providing the Confidential Information, the Employer makes no representations, either expressly or impliedly as to its adequacy, sufficiency, completeness, correctness or its lack of defect of any kind, including any patent or trade mark infringement that may result from the use of such information.
  30. Termination
  31. This Agreement will automatically terminate on the date that the Employee's Employment with the Employer terminates or expires, as the case may be. Except as otherwise provided in this Agreement, all rights and obligations under this Agreement will terminate at that time.
  32. Assignment
  33. Except where a party has changed its corporate name or merged with another corporation, this Agreement may not be assigned or otherwise transferred by either party in whole or part without the prior written consent of the other party to this Agreement.
  34. Amendments
  35. This Agreement may only be amended or modified by a written instrument executed by both the Employer and the Employee.
  36. Governing Law
  37. This Agreement will be construed in accordance with and governed by the laws of New Zealand.
  38. General Provisions
  39. Time is of the essence in this Agreement.
  40. This Agreement may be executed in counterpart.
  41. Headings are inserted for the convenience of the parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.
  42. The clauses, paragraphs, and subparagraphs contained in this Agreement are intended to be read and construed independently of each other. If any part of this Agreement is held to be invalid, this invalidity will not affect the operation of any other part of this Agreement.
  43. The Employee is liable for all costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by the Employer in enforcing this Agreement as a result of any default of this Agreement by the Employee.
  44. The Employer and the Employee acknowledge that this Agreement is reasonable, valid and enforceable. However, if a court of competent jurisdiction finds any of the provisions of this Agreement to be too broad to be enforceable, it is the intention of the Employer and the Employee that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable, bearing in mind that it is the intention of the Employee to give the Employer the broadest possible protection to maintain the confidentiality of the Confidential Information.
  45. No failure or delay by the Employer in exercising any power, right or privilege provided in this Agreement will operate as a waiver, nor will any single or partial exercise of such rights, powers or privileges preclude any further exercise of them or the exercise of any other right, power or privilege provided in this Agreement.
  46. This Agreement will inure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns, as the case may be, of the Employer and the Employee.
  47. This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise.

IN WITNESS WHEREOF ____________________ and ____________________ have duly affixed their signatures under hand and seal on this ________ day of ________________, ________.

_______________________________
WITNESS:  ______________________
Address:  ________________________
Occupation:  _____________________

__________________________(Employer)

Per:____________________________ (Seal)

_______________________________
WITNESS:  ______________________
Address:  ________________________
Occupation:  _____________________

_______________________________
______________________(Employee)

Confidentiality Agreement Page of
©2002-2022 LawDepot.com®

Last updated May 25, 2022

What is a Confidentiality Agreement?

A Confidentiality Agreement is a legal agreement between two parties that prevents the release of information, ideas, transaction details, and more to third parties.

Businesses commonly use these agreements during interactions with potential purchasers, clients, or hires to ensure confidential or proprietary information isn’t misused to the detriment of the owner. Instead, the document outlines the permitted uses of the information in question. It also acts as evidence of an agreement in court if the recipient breaches the contract.

A Confidentiality Agreement is also known as:

  • Non-disclosure agreement (NDA)
  • Confidential disclosure agreement
  • Proprietary information agreement
  • Secrecy agreement

Who are the parties in a Confidentiality Agreement?

A Confidentiality Agreement has two parties:

  • Information Provider: discloses sensitive information for a specified purpose.
  • Information Recipient: signs the Confidentiality Agreement, receives the information, and promises not to release or misuse the information.

When should I sign a Confidentiality Agreement?

A request to sign an agreement shouldn’t be taken personally. Think of the document as a substitute for trust. If an individual or business doesn’t know you, a Confidentiality Agreement is an easy way to ensure you don’t share sensitive information with competitors while building trust.

You should sign a Confidentiality Agreement when it’s necessary to protect confidential information, inventions, ideas, or artist creations during discussions, proposals, and negotiations. Common scenarios include when:

  • An employer wishes to protect company information while negotiating a position with a potential new hire or giving new responsibilities to an existing employee.
  • A client wishes to keep their company or personal information private when hiring an independent contractor or consultant.
  • During a pending company acquisition, the seller wishes to keep the proposed terms of the agreement and company information private (e.g., the research or "due diligence" phase).
  • Two or more businesses wish to begin working together and want to keep negotiations private (e.g., a joint venture, merger, partnership, etc.).

If you’re an employer hiring new employees, a more detailed Employment Contract can better outline confidentiality regulations between an employer and employee.

When is information not confidential?

Information is not confidential when:

  • It's already known in the industry
  • It becomes publicly known, through no fault of the recipient
  • It's already rightfully in the recipient’s possession
  • Created by the recipient through independent research
  • Rightfully disclosed and obtained from a third party

Can a Confidentiality Agreement last forever in New Zealand?

The obligations created by most Confidentiality Agreements in New Zealand have an expiry date, at which point the information provider will expect the recipient to either destroy or return the confidential information. However, they can be in effect indefinitely as well.

It’s common for Confidentiality Agreements to extend beyond the duration of a business relationship if the sharing of trade secrets took place. Trade secrets can include methods, recipes, techniques, etc.

As well, personal information in New Zealand is protected by the Privacy Act 1993.

How do I create a Confidentiality Agreement in New Zealand?

Use LawDepot's Confidentiality Agreement template to create a unique contract for your situation. Simply answer the questions in our online form to generate a document that you can download, print, and sign. The steps to completing the form are as follows:

1. Provide party details

The details of your Confidentiality Agreement will vary depending on the relationship between the information provider and the recipient. As such, it's important to describe the parties to the contract, including their names, addresses, and relationship with each other. For example, Confidentiality Agreements are common between:

  • Employers and their employees
  • Clients and independent contractors
  • Buyers and sellers of assets or businesses
  • Product inventors and evaluators

If the agreement involves businesses, you can use the company name in place of an individual's name. Also, if the contract is between a buyer and seller, state whether the sale is of a business, company shares, or another asset. 

Likewise, if the recipient of the confidential information is an employee or a contractor, you can include their job title and description. This makes clear why the individual has access to sensitive information. 

2. State the information needing protection

A Confidentiality Agreement protects the disclosure of various types of information, such as:

  • Accounting information: accounting procedures, payroll, software, reports, etc
  • Business operations: employer and employee personnel data and any internal cost information and operational procedures
  • Customer information: client lists, contracts, and business relationships
  • Intellectual property: patents, trade secrets, proprietary software, copyrights, test data, computer technology, and scientific information
  • Marketing information: campaigns, projects, and more
  • Product and service information: procedures, packaging, equipment, and production techniques
  • Proprietary computer technology: any information relating to unique computer applications, tools, or systems

3. Describe the permitted use of the confidential information (if applicable)

If you selected the “other” type of agreement at the beginning of the questionnaire, describe in your own words how the recipient is permitted to use the confidential information.

Use specific wording if the recipient can only use the information for a particular purpose. Use general language for more general purposes.

4. Outline the terms of the agreement

State whether the Confidentiality Agreement will end on a specific date or continue indefinitely. Also, include whether there are non-compete or non-solicit clauses and when they end.

What is a non-compete clause?

A non-compete clause restricts the recipient from starting a competing company or disclosing confidential information to competitors. However, it’s important to note that it can’t prevent people from working for competitors.

What is a non-solicit clause?

Non-solicitation clauses are often included in Confidentiality Agreements among businesses during early discussions regarding transactions. This clause restricts the purchaser from hiring the employees of the seller.

Most non-solicit clauses last one or two years, but they can extend for longer periods as well. However, it’s important to note that a court may not uphold this clause if it deems the length of time unreasonably long for the particular situation.

5. Include any additional clauses

If there are any terms or conditions unique to your situation that LawDepot's Confidentiality Agreement template doesn't address, you can include them here.

6. Outline the signing details

State when the parties will sign the Confidentiality Agreement and if witnesses will be present.

Having a witness present for the signing helps reinforce the validity of the signatures on the contract. The witness can verify the identity of the signers and attest to their willingness to enter the agreement.

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