‘Commercial in confidence’ is commercial information which must be kept confidential between the relevant parties. This is common for businesses that are transacting together and is crucial in protecting both business’s interests. Though similar, the term has different applications in the public and private sectors. This article will explain what amounts to commercially confidential information, and how confidentiality clauses protect it.
What’s Commercially Confidential Information?
Commercial in confidence generally takes the form of a term in a confidentiality clause, which outlines an obligation to not disclose confidential information.
Confidential information is any secret information that, if revealed, could cause harm. Typically, confidential information takes the form of trade secrets or sensitive, commercially valuable information.
Unauthorised use of confidential information will result in a breach of confidence, so it’s important to understand your rights regarding information that is confidential.
Private and Public Sector Application
Freedom of Contract
Private confidentiality clauses reflect the principle of freedom of contract. Parties are free to contract as they please, including as relating to the disclosure of information. Therefore, commercial in confidence must take the form of an express term in a contract or a confidentiality agreement. An NDA can also protect this information.
Non-Disclosure Agreements (NDAs)
The best way to protect your commercial information is by using a Non-Disclosure Agreement (NDA). An NDA will require the party to whom you are disclosing information to refrain from releasing this information to anyone else. However, you must be careful to ensure that your Agreement covers all aspects of the information you wish to protect and applies at the time when the information was first disclosed by you.
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A court is not likely to enforce commercial in confidence obligations if not expressly incorporated into a contract. While contractual terms can be implied at common law, a recent case suggests this does not extend to confidence.
The High Court overturned the case of Commonwealth Bank of Australia v Barker in 2014, finding that mutual trust and confidence imposed wider obligations to the operation of an employment agreement than necessary.
Whether the court would imply confidence into a contract concerning clearly commercially valuable information is uncertain, though CBA v Barker suggests this would not be the case.
In contrast to private commercial in confidence obligations, legislation restricts the Government’s entitlement to confidence in commercial contracts.
The Freedom of Information Act 1982 (Cth) requires an overriding public interest against disclosure, such as a private sector party’s insistence in confidentiality. Otherwise, it is generally safe to assume that a government contract will be, at least partially, open to public scrutiny.
If contracting with the Government, it’s useful to determine what role public interest may play in the confidentiality of the agreement. Seeking the help of a contract lawyer would be advisable.
Commercial in confidence protects confidential information by way of confidentiality clauses or agreements. Private sector application relies on the freedom to contract to terms, whereas government contracts have an obligation to the public. Confidentiality clauses require express incorporation and are unlikely to be implied. However, public interest may prevail in a public sector contractual relationship.
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