Release of confidential information: Overview, definition, and example
What is release of confidential information?
A release of confidential information refers to a situation where a party discloses private, sensitive, or proprietary information to another party, either voluntarily or under specific conditions outlined in a contract. This can happen for legal, business, or compliance reasons.
In many cases, contracts include confidentiality agreements or non-disclosure clauses that limit when and how confidential information can be shared. A release of confidential information clause defines the circumstances under which disclosure is allowed and who has the authority to approve it.
Why is release of confidential information important?
Confidential information is often critical to a business’s success, whether it’s financial data, trade secrets, customer lists, or business strategies. Without proper control over how this information is released, a company risks financial loss, competitive disadvantage, or legal liability.
A release of confidential information clause helps businesses:
- Protect sensitive information from unauthorized disclosure.
- Define clear conditions for when and how confidential information can be shared.
- Prevent misuse by employees, contractors, or third parties.
Understanding release of confidential information through an example
Imagine a technology startup partners with a marketing agency to launch a new product. The startup shares confidential product details and marketing strategies with the agency under a non-disclosure agreement (NDA). The NDA includes a release of confidential information clause, stating that the agency may only disclose the information if required by law or with the startup’s written approval.
In another example, an employee at a financial firm has access to client investment records. Their contract includes a release of confidential information clause that allows disclosure only to regulatory authorities if legally required. This ensures that sensitive client data remains protected unless disclosure is legally mandated.
Example of a release of confidential information clause
Here’s how a release of confidential information clause might appear in a contract:
"Neither Party shall disclose Confidential Information to any third party without the prior written consent of the Disclosing Party, except as required by law or as necessary to fulfill contractual obligations."
Conclusion
A release of confidential information clause ensures that sensitive business information remains protected and is only disclosed under strictly defined conditions. It helps businesses maintain security, prevent legal risks, and safeguard competitive advantages.
For SMBs, including a clear confidentiality and release clause in contracts is essential for protecting valuable business information and maintaining trust in partnerships.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.