What is 'Commercial in Confidence'?

Articles > Intellectual Property

What is ‘Commercial in Confidence’?

February 9, 2022         Ava Akbarian

‘Commercial in confidence’ refers to confidential commercial information between parties. It is important to legally protect the information and interests of businesses in transactions.

What is confidential information?

Confidential information is any commercially sensitive information which may cause harm if revealed. This may include trade secret, intellectual property, data room access or company financial documents.

Information may not be considered confidential if:

  • It is or becomes public knowledge, unless through any breach of obligation; or
  • Is independently acquired without reference to confidential information.

It is important to carefully consider the definition of ‘Confidential Information’ when drafting, signing or negotiating a confidentiality clause or agreement.

Please speak to a lawyer if you are unsure about the scope of confidential information best suited to your business in transactions.

How to protect your businesses’ confidential information

There are legal mechanisms which ensure parties do not disclose commercial in confidence without consent.

Term in a Confidentiality Clause

Commercial in confidence is generally addressed through a confidentiality clause within a contract or agreement.

It is important to include a confidentiality clause when entering into transactions which require disclosure of your business’ commercially sensitive information.

The clause can be mutual or may identify a party as the Discloser of information. 

A confidentiality clause commonly appears in an employment contract, or contractor agreements.

Non-Disclosure Agreement or Confidentiality Agreement

The legal obligation not to disclose commercial in confidence may also appear in the form of a separate Non-Disclosure Agreement (NDA) or Confidentiality Agreement (CA).

A Confidentiality Agreement is more commonly used where there is no other contract or agreement formed yet. It can protect your business in earlier discussions prior to a transaction.

Features to include in a Confidentiality Clause or Confidentiality Agreement

Term

When signing a Confidentiality Agreement or clause it is important to take note of the time period specified.

Even where the likelihood of breach is low, it is more suitable to include a specified time period to avoid being legally obligated for an unnecessary period of time.

Parties

A confidentiality agreement should clearly outline the parties to the agreement.

Scope and use of the commercial in confidence

As noted above, defining ‘Confidential Information’ will help avoid entering an unreasonable contract, and protect your information.

A Confidentiality Agreement or clause should limit the use of confidentiality information to what is necessary.

Return or destruction of confidential information

Confidentiality Agreements may consider the sensitive information after the transaction is complete. They may request a destruction or return of any commercially sensitive information where reasonable.

Breach in confidence

A Confidentiality Clause or Agreement may wish to consider any action that will be taken if there is a clear breach.

They may provide demands including a request for the party to cease using or disclosing confidential information, monetary compensation or ask to be notified as soon as a breach is known to the party.

If you are unsure about how to protect your commercial in confidence when entering into a business transaction or suspect a breach in confidence, please speak to a lawyer at OpenLegal.


For assistance with drafting or reviewing a Confidentiality Agreement or Confidentiality Clause please contact us by filling out the form on this page or calling 1300 337 997

About Ava Akbarian

Ava works in the legal content team at OpenLegal while studying in her fourth year of Bachelor of Laws and Communications (Journalism) at the University of Technology Sydney. Her interests are legal reporting, court reporting and medical law.