Why companies use a confidentiality agreement template

Of all the things that companies today appreciate, it is what happens behind the doors of the company. Most modern companies keep trade secrets and guard them jealously. When they hire a new person, the human resources department will have a large number of documents that need to be signed. Of these, one of the most important is the confidentiality agreement. This form is used to ensure that the new hire agrees not to discuss anything they see or learn while on the company employee and, in many cases, long afterward. Most companies use a confidentiality agreement template to make creating this form easier.

The confidentiality agreement is in many ways the equivalent of a nondisclosure agreement in the sense that it is intended to protect the company from the loss of any confidential information or intellectual property. While the two agreements may be similar in nature, you will find that the main difference between the two is the penalties in the event that an employee breaches the contract and reveals confidential information. The most severe penalties are reserved for a confidentiality agreement and can lead to criminal lawsuits and very heavy fines, if not prison terms.

The agreement template can be used to provide a very specific document that not only describes exactly what is covered by the agreement, but goes into great detail regarding the penalties for breaches of confidentiality. This formula is used to ensure that there is absolutely no possibility of misunderstanding on the part of the employee or the employer. Once signed, this agreement becomes a legally binding contract that can be used in a court of law.

You can pay an attorney to draft this agreement if you are a large company with a large enough budget to cover the costs, but this is not necessary as you can do it yourself. Of course, you can write your own agreement using one of the many different templates that are available for download online. Both documents are completely binding in a court of law, the difference is the amount of money you will have to spend. Each of them must be signed by both parties and in many states must be notarized to be legally binding.

When you need a nondisclosure agreement template, you can find many different samples online to choose from, or you can purchase them from many office supply stores. The ones you download will often include instructions for completing them so that they meet all the legal requirements in your particular state.