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Confidentiality Agreement

A confidentiality agreement [sometimes called a non-disclosure agreement] is any contract intended to maintain confidentiality.  Confidentiality agreements may be presented to trade creditors, often in connection with a request that the customer provide copies of its financial statements to the creditor. The parties to a confidentiality agreement usually specify how confidential materials will be recognized. Sometimes, it is agreed that all confidential material must be stamped "Confidential." Other times, the parties will simply agree that any information disclosed concerning certain types of information (such as financial statements) will be considered as confidential and covered by the confidentiality agreement.

Hint: To avoid potentially costly litigation, the credit department should stamp and segregate financial statements received from customers subject to a confidentiality or non-disclosure agreement. This will minimize the possibility of accidental disclosure.

Edited by Michael C. Dennis, author of "1001 Collection Tools and Tips."