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Confidentiality Undertaking Agreement

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CONFIDENTIALITY UNDERTAKING AGREEMENT

This Confidentiality Undertaking Agreement (the "Agreement") is made as of by and between Disclosing Party Name: (Disclosing Party) and Receiving Party Name: (Receiving Party). The Disclosing Party and the Receiving Party are each a "Party" and collectively the "Parties."

RECITALS

WHEREAS, the Disclosing Party possesses certain confidential, proprietary or commercially sensitive information, whether oral, written, electronic or otherwise, that relates to its business, products, services, customers, finances, technology and know-how, which the Disclosing Party may disclose to the Receiving Party for the purpose described below; and

WHEREAS, the Parties wish to define the terms and conditions under which Confidential Information may be disclosed and to protect the Disclosing Party's legitimate interests in such information.

WHEREAS, the Parties intend that this Agreement govern all disclosures of Confidential Information made by the Disclosing Party to the Receiving Party on or after the effective date stated above.

NOW, THEREFORE

In consideration of the mutual promises and covenants set forth herein, the Parties agree as follows:

1. DEFINITIONS

1.1 "Confidential Information" means any information disclosed by the Disclosing Party to the Receiving Party, whether in written, electronic, oral or other form, including but not limited to business plans, financial data, customer lists, pricing, technical data, designs, software, trade secrets, prototypes, processes, specifications, and any analyses, compilations, studies or other documents prepared by the Receiving Party that contain or reflect such information. Confidential Information shall also include information clearly designated as confidential at the time of disclosure or, if disclosed orally, reduced to writing and identified as confidential within thirty (30) days of disclosure.

1.2 "Purpose" means the evaluation and discussion of a potential business relationship or transaction as described by the Parties in writing. Purpose description (brief):

2. OBLIGATIONS OF RECEIVING PARTY

2.1 Non-Disclosure. The Receiving Party shall not disclose any Confidential Information to any third party without the prior written consent of the Disclosing Party, except as expressly permitted by this Agreement.

2.2 Use Limitation. The Receiving Party shall use Confidential Information solely for the Purpose and for no other purpose, including but not limited to commercial exploitation or competitive use.

2.3 Safeguards. The Receiving Party shall protect Confidential Information with the same degree of care it uses to protect its own confidential information, but in no event less than a reasonable standard of care, and shall implement and maintain administrative, physical and technical safeguards to prevent unauthorized use or disclosure.

2.4 Restricted Personnel. Disclosure of Confidential Information within the Receiving Party's organization shall be limited to employees, officers, contractors or advisors who have a strict need to know for the Purpose and who are bound by confidentiality obligations no less protective than those set forth in this Agreement.

3. EXCLUSIONS FROM CONFIDENTIAL INFORMATION

3.1 The obligations in Section 2 shall not apply to information which: (a) is or becomes publicly known through no breach of this Agreement by the Receiving Party; (b) was lawfully in the Receiving Party's possession prior to receipt from the Disclosing Party; (c) is rightfully received by the Receiving Party from a third party without restriction and without breach of any obligation of confidentiality; or (d) is independently developed by the Receiving Party without use of or reference to the Disclosing Party's Confidential Information.

4. COMPULSORY DISCLOSURE

4.1 If the Receiving Party is required by law, regulation or order of a court or governmental authority to disclose Confidential Information, the Receiving Party shall, to the extent legally permitted, provide the Disclosing Party prompt written notice of such requirement so that the Disclosing Party may seek a protective order or other appropriate remedy. The Receiving Party shall disclose only that portion of Confidential Information that it is legally required to disclose and shall use reasonable efforts to obtain confidential treatment for the disclosed information.

5. TERM AND SURVIVAL

5.1 This Agreement shall commence on the effective date set forth above and shall continue in full force for a period of from such date, unless earlier terminated by mutual written agreement of the Parties. Notwithstanding termination, the Receiving Party's obligations with respect to Confidential Information shall survive for the period specified in this Section or for such longer period as is required by applicable law with respect to trade secrets.

6. RETURN OR DESTRUCTION

Upon the Disclosing Party's written request or upon termination of this Agreement, the Receiving Party shall promptly return or destroy, at the Disclosing Party's election, all documents and materials (and all copies thereof) containing Confidential Information. If destruction is elected, the Receiving Party shall certify in writing within thirty (30) days that such destruction has been completed.

7. REMEDIES

7.1 The Receiving Party acknowledges that any breach of this Agreement may cause irreparable harm to the Disclosing Party for which monetary damages may be inadequate. Accordingly, in the event of any actual or threatened breach, the Disclosing Party shall be entitled to seek injunctive relief, specific performance and any other equitable remedies in addition to any other remedies at law or in equity.

7.2 The Receiving Party shall indemnify and hold harmless the Disclosing Party from and against any losses, damages, liabilities, costs and expenses (including reasonable attorneys' fees) arising out of the Receiving Party's breach of this Agreement.

8. NOTICES

All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, sent by certified mail (return receipt requested), courier or by nationally recognized overnight delivery service to the addresses set forth below or to such other address as a Party may designate in writing.

9. AMENDMENTS; WAIVER; COUNTERPARTS

9.1 This Agreement may be amended or modified only by a written instrument executed by authorized representatives of both Parties. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the Party waiving compliance.

9.2 This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures transmitted by electronic means shall be deemed binding for all purposes.

10. GOVERNING LAW; SEVERABILITY; ENTIRE AGREEMENT

10.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to its conflict of laws principles.

10.2 Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall remain in full force and effect, and the Parties shall negotiate in good faith a valid provision that most nearly effects the Parties' intent.

10.3 Entire Agreement. This Agreement constitutes the entire understanding between the Parties with respect to the subject matter hereof and supersedes all prior discussions, agreements and understandings between them relating thereto.

11. MISCELLANEOUS

11.1 Assignment. Neither Party may assign or transfer any rights or obligations under this Agreement without the prior written consent of the other Party, except that a Party may assign this Agreement without consent in connection with a merger, acquisition or sale of all or substantially all of its assets.

11.2 Remedies Cumulative. Except as otherwise provided herein, the remedies provided in this Agreement are cumulative and are in addition to any other remedies available at law or in equity.

ACKNOWLEDGEMENT

Each Party acknowledges that it has read and understands this Agreement, that it has been given the opportunity to seek independent legal advice, and that it agrees to be bound by its terms.

Disclosing Party

Printed name:

By:

Date:

Receiving Party

Printed name:

By:

Date:

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What a Confidentiality Undertaking Agreement Is and when it's used

A Confidentiality Undertaking Agreement is a legally binding contract in which one or more parties agree to keep specified information confidential and to limit its use and disclosure. It defines the categories of protected information, the permitted uses, the duration of confidentiality, and remedies for breach. Commonly used in transactions, negotiations, employee onboarding, supplier relationships, and due diligence, the agreement can be drafted as unilateral or mutual. In U.S. practice it functions like an NDA but may emphasize procedural undertakings, record handling, and return or destruction obligations.

Why parties use a Confidentiality Undertaking Agreement

The agreement protects trade secrets, proprietary data, and business strategies by setting clear duties, limits on disclosure, and authorized recipients. It clarifies obligations that support enforcement, evidences intent to maintain secrecy, and reduces dispute risk during negotiations or collaboration under U.S. e-signature laws such as ESIGN (15 U.S.C. ch. 96) and state UETA regimes.

Why parties use a Confidentiality Undertaking Agreement

Who typically signs or completes this agreement

The agreement is also used by legal counsel, advisors, acquirers, and industry partners to document expectations before sharing sensitive material.

  • Startups and investors exchanging pitch decks and financials during fundraising.
  • Vendors and subcontractors receiving customer data or technical specifications.
  • HR teams and new hires when onboarding access to proprietary processes.

Key signer roles and what they represent

In-house Counsel

Drafts or approves the undertaking to align confidentiality scope with corporate policy and litigation exposure; coordinates retention, privilege, and enforcement considerations with business stakeholders.

Vendor Representative

Signs on behalf of a supplier or third party to accept restrictions, implement access controls, and confirm procedures for returning or destroying confidential materials after the relationship ends.

Core clauses every professional Confidentiality Undertaking should include

A clear structure helps courts and counterparties interpret obligations and enforce remedies; include focused clauses rather than broad undefined language.

Parties

Full legal names and entity types for each party, with signatory authority and addresses to avoid disputes over who is bound.

Definition

Precise definition of Confidential Information, examples of included and excluded data, and rules for aggregated or de-identified information.

Permitted Use

Narrow, stated purposes for which the receiving party may use the confidential information and any limits on further sharing.

Obligations

Specific care standards, permitted disclosures (e.g., legal counsel), required safeguards, and notification procedures for unauthorized access.

Term and Return

Duration of confidentiality, survival clauses, and process for returning or destroying materials at termination.

Remedies

Injunctive relief, damages, and indemnity language plus choice of law and dispute resolution provisions.

Essential information fields to include

Effective Date: MM/DD/YYYY
Party Names: Full legal entity names
Confidential Scope: Defined categories
Permitted Purpose: Narrow use case
Term Length: State years or event
Signature Blocks: Name, title, date

Step-by-step: preparing, signing, and storing the agreement

Follow a clear sequence to reduce errors and ensure each party has the required authority and supporting documentation before sharing confidential materials.

  • 01
    Gather details: Collect legal names, addresses, and identification.
  • 02
    Draft terms: Limit scope and state permitted uses.
  • 03
    Review legally: Have counsel review choice-of-law and remedies.
  • 04
    Execute and store: Sign, distribute countersigned copies, and archive securely.

Configuring an online workflow for completion and eSigning

Set up fields and authentication to match the agreement's sensitivity and the parties' compliance needs.

Field Configuration
Signer Order Sequential or parallel routing
Authentication Email, SMS code, or KBA
Conditional Fields Show/hide based on responses
Notifications Automatic reminders and completion receipts

Where to send signed copies and who retains records

Distribute executed originals to each party and retain a master copy in corporate records; specify custodian and access controls.

  • Counterparty: Provide each party a signed PDF
  • Corporate Records: Store master copy centrally
  • Legal Counsel: Keep for audit and enforcement
  • Third-Party Custody: Escrow or secure repository if required

Distribution and eSignature methods to consider

For high-risk disclosures, add multi-factor authentication, audit trails, and consider a notary or escrow; these steps improve evidentiary value under ESIGN (15 U.S.C. ch. 96) and state rules.

  • Email signing: Standard, simple authentication
  • Remote notarization: Audio-video identity proofing
  • Secure portal: Access-controlled document sharing

Key timelines, notice periods, and processing expectations

Identify dates and response windows to avoid inadvertent disclosure or missed return obligations; use calendar-based triggers where possible.

Effective Date:

When obligations begin; use MM/DD/YYYY.

Confidentiality Term:

State duration in years or until event.

Return or Destruction:

Specify days after termination for return.

Notice Periods:

Time for breach notice and cure.

Record Retention:

How long signed copies are kept.

Common mistakes to avoid when preparing the agreement

  • Using overly broad or undefined terms for 'Confidential Information' that effectively makes routine data subject to strict restrictions and reduces enforceability.
  • Failing to verify signer authority or using informal signatories, which can create disputes over who is bound or delay enforcement actions.
  • Not specifying the permitted purpose or downstream disclosure rules, leading to confusion about whether sharing with advisors is allowed.
  • Omitting return, destruction, or certification obligations, leaving unclear responsibilities at termination and increasing data exposure risk.

Risks and legal consequences of an incorrect or missing agreement

Breach Liability: Monetary damages possible
Injunctive Relief: Court may order halt
Contract Termination: Loss of business relationships
Reputational Harm: Public disclosure risk
Regulatory Exposure: HIPAA or other fines
Evidence Gaps: Unsigned or vague terms weaken claims

How a Confidentiality Undertaking compares with similar documents

Compare common document variants so you choose the right form: standalone undertaking, mutual NDA, or trade-secret-specific agreement.

Criteria Confidentiality Undertaking Mutual NDA
Purpose limited procedural scope broad reciprocal protection
Typical Parties one-way or one recipient two-way parties
Formality often transaction-specific standard contract
Notarization optional optional

Real-world examples of use across sectors

Actual customer scenarios show how the agreement supports transactions and compliance when sharing sensitive materials.

Martin Properties — Real Estate

During remote closings, the firm used an undertaking to protect buyer data and escrow instructions

  • Needed rapid execution without in-person signings
  • Tim Martin said the platform allowed compliant online execution and helped maintain transaction speed while preserving confidentiality obligations.

Fertility Centers — Healthcare

A provider shared patient-related operational guidance with a vendor under a HIPAA-aware undertaking

  • Vendor agreed to BAA-level safeguards
  • John Butler noted that responsive eSignature workflows enabled secure sharing with audit trails and record retention for compliance.

eSignature vendor pricing and feature snapshot relevant to this agreement

Typical capability and pricing differences among common eSignature providers; signNow is listed first per comparison conventions. Confirm vendor plans for feature availability that matter to confidentiality and compliance.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by vendor Varies by vendor Varies by vendor Varies by vendor
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies Varies Varies

Frequently asked questions about Confidentiality Undertaking Agreements

Answers to common practical and legal questions about execution, enforceability, and eSigning under U.S. law.


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