Confidential information

Definition

Confidential information is data disclosed by one party to another on the understanding that it will be kept secret and used only for an agreed purpose. Contracts define its scope, list exclusions (such as already-public information), and set the duration of the duty. In the EU, trade secrets receive additional protection under the Trade Secrets Directive, implemented in Dutch law by the Wet bescherming bedrijfsgeheimen.

Example

During a tender, a bidder receives the client's pricing models marked confidential and may use them only to prepare its proposal.

Why this is a business risk

Confidential information shared without adequate contractual protection can be used by competitors, disclosed to the market, or retained by departing employees. The risk intensifies when information flows to subcontractors or offshore teams who are not parties to the original NDA. A breach can be difficult to detect and harder to quantify, making prevention far cheaper than enforcement.

How to manage it

• Mark sensitive materials as confidential at the time of disclosure so there is no dispute about scope later.
• Define "confidential information" broadly in the contract but list clear exclusions: public domain, independently developed, or received from a third party.
• Require the recipient to impose the same confidentiality obligations on its own employees and subcontractors.
• Set a destruction or return obligation at end of contract so sensitive materials do not remain in the other party's systems.

Legal references

• Wbb (EU 2016/943) Dutch Trade Secrets Protection Act

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.