What to do if a confidentiality agreement is breached

startup marketing

When dealing with a breach of a confidentiality agreement it’s important to note a confidentiality agreement is one of the more common legal documents. Many businesses insist associates, contractors and employees enter into a confidentiality agreement before working together.

In most situations, ensuring your counterparty has signed a confidentiality agreement will ensure that your confidential information is kept exactly that: confidential. Unfortunately, however, because of the relatively common nature of such agreements, a breach of a confidentiality agreement is not uncommon.

In the event of a breach of the agreement, there are a number of steps which it is prudent to take. This article will set out an overview of those steps.

1. Review the confidentiality agreement

The first, and perhaps most obvious, step to take is to review the confidentiality agreement. In certain circumstances, the remedies for a breach of confidentiality agreement will be set out in the actual contract itself. In any case, it is important to make sure that the breach you have discovered is actually a breach under the terms of the confidentiality agreement.

2. Investigate the breach

Investigating the breach is the next step in the process. It’s not enough that you merely suspect your counterparty of having breached the confidentiality agreement, you need to have concrete proof that this has occurred. There are two key issues to look for.

  • How confidential information was released. Was it an employee of your counterparty, was it intentional?
  • The effect the release of the information had on your business, both from an economic point of view and a more general perspective.

3. Approach a lawyer to discuss options

If the breach of the confidentiality agreement has had a significantly detrimental effect on your business, it’s time to discuss your options with a lawyer. In the majority of cases you will be in a position to take legal action for breach of contract, however, you will need to work out whether it’s worth your time and effort to do so. Other potential legal recourses may include copyright infringement, patent infringement or breach of fiduciary duty.

The exact legal strategy you should use will depend on your individual circumstances, which is why you will need to work with a lawyer. However, the good news is if you have signed a confidentiality agreement, it’s very likely you will have some recourse.

To conclude

Using a confidentiality agreement is the most effective way to ensure confidential information stays protected, but no legal document can fully protect you from a dishonest or incompetent partner. If a counterparty breaches a confidentiality agreement, go through the above points and work with a lawyer to check out your options.

This article was originally published on July 15, 2013.

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