Confidentiality Clause template clause

    Updated: 22 March 2026

    Please note: these example clauses are intended as a starting point, not as legal advice. Always adapt the text to your specific situation and have important contracts reviewed by a legal professional.

    Clause text

    Article [X] - Confidentiality

    1. "Confidential Information" means all information, in any form, disclosed by one Party ("Disclosing Party") to the other Party ("Receiving Party") that:
    (a) is marked as "confidential," "proprietary," or with a similar designation; or
    (b) by its nature or the circumstances of its disclosure would reasonably be understood to be confidential.

    2. The Receiving Party shall:
    (a) hold all Confidential Information in strict confidence;
    (b) not disclose Confidential Information to any third party without the prior written consent of the Disclosing Party;
    (c) use Confidential Information solely for the purposes of performing its obligations under this Agreement;
    (d) limit access to Confidential Information to those employees, agents, and professional advisors who have a need to know and who are bound by confidentiality obligations no less protective than those contained herein.

    3. The obligations under this Article shall not apply to information that:
    (a) is or becomes publicly available through no fault of the Receiving Party;
    (b) was already in the Receiving Party's possession before disclosure, as evidenced by written records;
    (c) is independently developed by the Receiving Party without reference to the Confidential Information;
    (d) is disclosed pursuant to a legal obligation, court order, or regulatory requirement, provided the Receiving Party gives the Disclosing Party reasonable prior notice to seek protective measures.

    4. Upon termination or expiry of this Agreement, or upon written request by the Disclosing Party, the Receiving Party shall promptly return or destroy all Confidential Information and certify in writing that it has done so. The Receiving Party may retain one archival copy solely for compliance and legal record-keeping purposes.

    5. The confidentiality obligations under this Article shall survive the termination or expiry of this Agreement for a period of [e.g. 3 years].

    What does this clause mean?

    A confidentiality clause protects sensitive business information that parties share during a commercial relationship. It defines what counts as confidential, who may access it, how it may be used, and what happens to it when the contract ends.

    This template uses a dual-test approach: information is confidential if it is either marked as such or would reasonably be understood to be confidential from context. This avoids the common pitfall of relying solely on markings, which are often forgotten in practice. The carve-outs in paragraph 3 are standard and protect the receiving party from liability for information that enters the public domain or was already known.

    Compliance monitoring is critical. According to Loio (2026), 71% of contracts are never monitored for compliance after execution, meaning confidentiality breaches can go undetected for months or years. A structured contract management process helps track who has access to confidential materials and whether return-or-destroy obligations are fulfilled at contract end.

    When should you use this clause?

    Include a confidentiality clause in any contract where parties will exchange sensitive commercial, technical, or strategic information. This covers supplier agreements, technology partnerships, consulting engagements, joint ventures, and outsourcing contracts.

    For situations where confidentiality is the primary purpose of the agreement (such as pre-acquisition due diligence), a standalone non-disclosure agreement (NDA) may be more appropriate. This clause template is designed for inclusion within a broader commercial contract.

    The survival period should reflect the sensitivity of the information. Trade secrets may warrant indefinite protection, while general business information typically justifies a survival period of 2 to 5 years. With 9.2% of annual revenue at risk due to poor contract management (World Commerce & Contracting), ensuring your confidentiality provisions are properly tracked and enforced can have a measurable financial impact.

    Customize these elements

    • 1Set the survival period (2, 3, or 5 years) based on the sensitivity of the information exchanged
    • 2Consider adding specific categories of information that are always deemed confidential (e.g. pricing, customer lists)
    • 3Specify whether the receiving party must notify the disclosing party before any court-ordered disclosure
    • 4Add data protection cross-references if personal data is included in the confidential information
    • 5Define the certification method for destruction (written statement from an authorised representative)

    Sources

    Manage all your contract deadlines automatically

    Tracking Contracts alerts you well before every notice period. No spreadsheets, no missed renewals.

    Start free month