Confidentiality Agreement

A confidentiality agreement is any contract intended to maintain confidentiality. Confidentiality agreements may be presented to trade creditors in connection with a request that the customer provide copies of its financial statements The balance shee A financial statement listing the assets, liabilities and owner’s equity of a business entity as of a specific date. t, income statement, statement of changes in financial position, statement of changes in owners' equity accounts, cash flow statement and notes. to the creditor A person, business or governmental agency with a claim against a debtor or debtor's business. claim A right to payment or other equitable remedy in the event of a breach of contract. against a debtor or business entity that owes money. or debtor's business. clai A right to payment or other equitable remedy Relates to the judicial means or court procedures by which legal and equitable rights are enforced. in the event of a breach of contract. m against a debto or business entity that owes money A medium of exchange; coined or stamped currency. . r or debtor 's business. . The parties Individuals involved in a sales transaction. In domestic sales: seller and buyer. In international sales: exporter and importer. In shipping: shipper and consignee. In letters of credit: beneficiary (seller) and applicant (buyer). exporter The person or company that sells or arranges to transport goods out of a country. and importer. In shipping: shipper Indemnity given by the beneficiary of a letter of credit to the negotiating bank to induce payment despite any discrepancies that may exist in the documents. and consignee An individual or company to whom cargo is shipped or consigned. . In letters of credit: beneficiary The person or company due payment in the letter of credit. Usually the exporter (seller). (seller) and applicant The party (generally buyer/importer) for whose account a letter of credit is established. (buyer). exporte The person or company that sells or arranges to transport goods out of a country. r and importer. In shipping: shippeIndemnity Compensation paid for damage or loss sustained or anticipated. given by the beneficiary of a letter of credit to the negotiating bank After the seller presents the required documents to this bank for review, it will notify the issuing bank that terms of letter of credit have been met. issuing ban Also known as the opening bank The account party's bank that issues or opens the credit. . It issues its commitment to the seller in the form of a letter of credit. k that terms of letter of credit have been met. to induce payment despite any discrepancies that may exist in the documents. r and consigne An individual or company to whom cargo is shipped or consigned. e. In letters of credit: beneficiar The person or company due payment in the letter of credit. Usually the exporter (seller). y (seller) and applican The party (generally buyer/importer) for whose account a letter of credit A financing instrument issued by a bank in favor of an exporter that substitutes the bank's creditworthiness for that of the importer. instrumen A right to the payment of money such as agency notes, commercial paper The unsecured promissory notes of large, financially sound corporations. , T-Bills, certificates of deposit (CD's), banker's acceptances and repurchase agreements. t issued by a bank in favor of an exporter that substitutes the bank's creditworthiness for that of the importer. is established. t (buyer). 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 Resolving conflicts in a court of law. , 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.