A confidentiality agreement, also known as a non-disclosure or secrecy agreement, is a legal contract between two parties that delineates confidential material, knowledge, or information that the parties wish to share for a certain purpose but want to restrict access to by third parties.

South African contract law is essentially a modernized version of Roman-Dutch law of contract. In the broadest definition, a contract is an agreement entered into by two or more parties with the serious intention of creating a legal obligation. The law of contract underpins private enterprise in South Africa and regulates it in the interest of fair dealings.

A legally binding confidential agreement should have the following features:

Confidentiality provision should be defined: When entering a confidentiality agreement between parties, the definition of confidentially should be specified. For the purpose of this agreement, “confidential information shall include all information or material that has or could have commercial value or other utility in the business in which the Disclosing party is engaged. If Confidential Information is in written form, the Disclosing party shall label or stamp the materials with the” Confidential” or some similar warning.

Non-disclosure: Where the receiving party uses confidential information for any purpose, it shall take all necessary precautions to ensure that such confidential information, particularly source code, should not be disclosed unless written permission is obtained in advance.

Exceptions to confidential information: A legally binding confidential or non-disclosure agreement has the following exceptions:
– Information which subsequently becomes publicly available without any breach of the receiving party.
– Which are disclosed by the receiving party to satisfy an order of the court.
– Independently developed by the receiving party.

Mutually Agreed/Unilateral: A Confidential agreement may be mutually agreed or it can be unilateral. Unilateral confidentiality agreements are where only one party discloses confidential information to the other, and a confidentiality agreement where all parties disclose confidential information to each other known as mutual confidentiality agreement.

Governing law: Every contract is governed by the laws of the land.

Time period/effective date and length of obligation: There should be a time period for the contract. It must determine how long the non-disclosure provision of the agreement shall survive. Parties will be released from this provision after termination of the contract or until the confidential information no longer qualifies as a trade secret.

Sensitive information during the course of business: A legally binding confidentiality agreement protects sensitive information from being disclosed to anyone else. One or more participants in the agreement promise not to disclose the information received from the other party.

Damages: The right to sue for damages for breach of contract makes a contract enforceable. The use of a confidentiality agreement prevents the loss of valuable patent rights. If a party bound under the confidentiality agreement discloses to another individual or company, the injured party can claim damages.