What Does 'Commercial in Confidence' Mean? | LegalVision

Confidential information refers to any information or document that a business wants to keep out of the public domain. The information must be:. Skiptocontent Searchfor: CancelSearch WhatDoes‘CommercialinConfidence’Mean? ByLaurenWray SeniorLegalProjectManager Home»LegalResources»Articles»CommercialContractArticles»WhatDoes‘CommercialinConfidence’Mean? Commercialinconfidencegenerallymeanssensitiveinformationthatanindividualorbusinessshareswithanotherpartyinconfidence.Therefore,thepersonreceivingthisinformationisobligatedtonotdiscloseorusethatinformationwithoutconsent.Thisarticlewilldiscussthebestwaystoprotectyourbusinesses confidentialinformation andwhattodoifthereisabreachofconfidence. WhatisConfidentialInformation? Confidentialinformationreferstoanyinformationordocumentthatabusinesswantstokeepoutofthepublicdomain.Theinformationmustbe: easilyidentifiable; showoriginality;and notbeofpublicknowledge. Confidentialinformationincludesanyinformationthattherecipienthasacquiredorbeenpresentedwiththroughoutthecommercialrelationship. Typesofconfidentialinformationinclude,butisnotlimitedto: tradesecrets; personalinformation; intellectualproperty;  financialstatements;and internalprocesses. HowDoIProtectMyBusinessesConfidentialInformation? ConfidentialityAgreement Aconfidentialityagreement,alsoknownasanon-disclosureagreement,isanagreementbetweentheownerofconfidentialinformationandthepartyinwhichtheyaresharingthatinformation.Confidentialityagreementsaresuitableforwhenyouareenteringintoinitialdiscussionswiththeotherpartypriortoenteringintoaformalrelationship.   Forexample,youmaywishtohireadeveloperforyournewapp.Todecideifthedeveloperisgoingtobesuitableforyourbusiness,youwillneedtodiscloseconfidentialbusinessinformationtothem.Inthisinstance,itwouldbeappropriatetohavethedevelopersignaconfidentialityagreement. ConfidentialityClauseswithinaContract Whenyouarereadytoproceedwithaformalrelationshipthatrequiresyoutocontinuouslydiscloseconfidentialinformationtotheotherparty,youshouldincludeaconfidentialityclausewithinyourcontract.Keyexamplesofthetypesofagreementstocontaintheseclausesare: employment; contractor;and  manufacturingagreements. Forexample,onceyouhavedecidedonthedeveloperyouaregoingtoworkwith,youshouldenterintoadevelopmentagreementwiththem.Theagreementwilldefinethetermsoftherelationshipasawhole,including: costs; exclusivity;and  termination. Still,itshouldalsoincludeconfidentialityprovisionstoprotecttheconfidentialinformationyouwillneedtosharewiththemthroughouttherelationship. Typically,aconfidentialityagreementorclausewillneedtoincludethe: partiestotheagreement; informationwhichistobekeptconfidential; obligationtomaintainsecrecyandtheexceptions,ifany,totheseobligations; scopeofpermitteduseoftheconfidentialinformation;and consequencesoffailingtocomplywiththerequirementssetoutintheagreement. DutyofConfidence Whenthereisnowrittenagreementinplace,theremaystillbean equitable dutyofconfidence. Adutyofconfidencedoesnotnecessarilyhavetobewritteninacontractifitcanbesatisfiedthattherewasanobligationtokeeptheinformationconfidential. Forexample,youhavehiredadeveloperforyourapp,andyouneedtoprovidethemwithyourbusinessplan.Youdonotsignaformalcontractwiththedeveloperandlaterfindtheyhavesharedyourstrategywithanotherbusiness.Duetothenatureoftherelationship,acourtmaydecidethatyousharedthebusinessplaninconfidence.Therefore,bysharingtheinformationwithcompetitorsorthegeneralpublic,thedeveloperwasinbreachofconfidence. Despitethis,itisbestpracticenottorelysolelyonthe equitabledutyofconfidence andtoprotectyourconfidentialinformationwithawrittencontract.Otherstepsyoucantaketoprotectyourinterestinclude: markingthedocumentasconfidential;and limitingaccesstotheconfidentialinformationtoonlythepeoplewhoneedtoseeit.  HowDoIDetermineifThereHasBeenaBreachofConfidence? Ifyoubelievetherehasbeenabreachofconfidenceandyouwishtotakeactionagainsttheotherparty,youwillneedtobeabletoprovethebreach.Foracourttodeterminetherehasbeenabreach,theywillassessthefollowing: WastheInformationConfidential? Evenifyouhavelabelledinformationas‘confidential’,itstillmaybedeterminedthattheinformationiswellknown.Iftheinformationispublicknowledgeorotherbusinessespossessthesamecontent,thenitislikelythatthisdoesnotsatisfytherequirementsofbeingconfidential.Alternatively,adocumentmaynotbemarked‘confidential’,butduetothenatureofitscontents,itismostlikelyconfidential.  Forexample,yourbusinesshasadatabaseofclientinformation.Youhavenotmarkedthedatabaseas‘confidential’,butthisislikelytomeettherequirementofconfidentialinformation.  WasThereanObligationofConfidence? Determiningwhethertherewasanobligationofconfidencewilldependonthenatureoftherelationshipbetweentheparties.Iftherewasawrittencontractoryouimpliedtotherecipientthattheyshouldkeeptheinformationconfidential,thenyoucanbesatisfiedthattherewasanobligationofconfidence.  Forexample,youshareyourclientlistwithyouremployeeforthemtocompletetheiremploymentduties.Youremployeewilltypicallybeunderanobligationnottosharethislistwithoutconsent. WastheBreachUnauthorised? Ifyouhaveconsentedtosharetheinformationthatyoudisclosedtotheotherparty,thiswillnotconstituteabreach.However,iftheotherpartyhassharedconfidentialinformationwithoutyourknowledgeorconsent,thenthisbreachwouldbeconsideredunauthorised. Forexample,youremployeeresignsfromyourbusinesstoworkforacompetitorandhassharedyourclientlistwiththeirnewemployer. DidYourBusinessSufferSignificantLossFromtheBreach? Theinformationthattherecipienthassharedwithoutyourconsentmaybeofhighcommercialvalueandcauselossordamagetoyourbusiness. Forexample,asaresultofyourcompetitorgettingaccesstoyourclientlist,theyhavemanagedtotakeoveroneofyourkeyaccountsleadingtosignificantfinancialloss. WhatDoIDoifThereHasBeenaBreachofConfidence? Whenyouhavedeterminedtherehasbeenabreachofconfidence,youmaywishtotakelegalactionagainsttheotherparty. Goingtocourtcanbeacostlyandlengthyprocess,andthereforeitisbesttotryandresolvethematteroutsideofcourt.Typically,thefirststepinthisprocessistosendaceaseanddesistlettertotheoffendingparty.Thelettershouldcommunicatetotheotherpartythattheyhavebreachedtheircontractandthatyouaretakingthematterseriously.Youshouldensurethelettercovers: thenatureofthebreach;  thedamagessufferedasaconsequence; yourdemands;and potentialconsequencesifthedemandsarenotmet. Yourdemandscanbesimplyfortheotherpartyto‘ceaseanddesist’usingyourconfidentialinformation.Or,theymaytaketheformofcompensation.Potentialconsequencesusuallystatethatyouwilltakefurtherlegalactioniftherecipientdoesnotcomplywiththeletter.  Ifnegotiatingoutsideofcourtisunsuccessful,youmaywishtocommenceformallegalproceedings.Ifproceedingsaresuccessful,therearetwopossibleoutcomesavailable: aninjunction: thiswillpreventthepartiesfrombeingabletokeepusingordisclosingtheconfidentialinformation;and  damages: thisismonetarycompensationforanylossescausedbythebreachofconfidence. KeyTakeaways Confidentialinformationtakesmanyforms,andasabusinessowner,youshouldalwaystakethenecessarystepstoprotectthisinformation.Contractualobligationscanhelpprotectyourconfidentialinformationanddeterthepersonreceivingtheinformationfromdisclosingitwithoutconsent.Iftheotherpartybreachestheircontractualobligations,thenyoumayhavealegalrighttoreceivecompensationfordamages.Ifyouwouldlikeassistancewithensuringyourbusinessesconfidentialinformationisprotected,contact LegalVision’sbusinesslawyers bycalling1300544755orfillouttheformonthispage. Wasthisarticlehelpful?     Thanks! Weappreciateyourfeedback–yoursubmissionhasbeensuccessfullyreceived. Canyoutelluswhyyoufoundithelpful? Howcanwebetterimprovethisarticle? Submit AboutLegalVision:LegalVisionisacommerciallawfirmthatprovides businesseswithaffordableandongoinglegalassistancethroughourindustry-firstmembership. 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DraftingConfidentiality,DisputeResolution,andAuditRightsClauses HowCanBusinessesProtectConfidentialInformation? 4KeyClausestoConsiderifYou’veReceivedanNDA Meetsomeofourlawyers EmmanuelGiuffre HeadofLegal JillMcKnight PracticeLeader AaronSuine PracticeLeader TimMak PracticeLeader EmmaJervis PracticeLeader Viewalllegalteamprofiles OurAwards 2020ExcellenceinTechnology&InnovationFinalist–AustralasianLawAwards 2020EmployerofChoiceWinner–AustralasianLawyer 2021FastestGrowingLawFirm-FinancialTimesAPAC500 2020AFRFast100List-AustralianFinancialReview 2021LawFirmoftheYear-AustralasianLawAwards 2019MostInnovativeFirm-AustralasianLawyer PrivacyPolicySnapshot Wecollectandstoreinformationaboutyou.Letusexplainwhywedothis. Whatinformationdoyoucollect? Wecollectarangeofdataaboutyou,includingyourcontactdetails,legalissuesanddataonhowyouuseourwebsite. Howdoyoucollectinformation? Wecollectinformationoverthephone,byemailandthroughourwebsite. Whatdoyoudowiththisinformation? 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