# Confidential information

Source: https://contracko.com/glossary/confidential-information

# Confidential information

Non-public information shared in confidence that the recipient must protect and not disclose.

## 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.

### How Contracko helps

Contracko stores contracts in an enterprise-secure repository where data is never used to train AI models. For portfolios with multiple NDAs and confidentiality provisions, the AI review extracts duration, scope, and return obligations so you can track what information is covered and when obligations expire.

## 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.

## Relevant for

[Software & SaaS](https://contracko.com/industries/software-saas)[Pharmaceuticals & Biotech](https://contracko.com/industries/pharma-biotech)[Consulting](https://contracko.com/industries/consulting)[AI & Data Companies](https://contracko.com/industries/ai-data)

## Related clauses

- [Confidentiality Clause](https://contracko.com/clause-library/confidentiality)
- [Data Processing Clause](https://contracko.com/clause-library/data-processing)
- [Intellectual Property Clause](https://contracko.com/clause-library/intellectual-property)

## Related terms

- [Non-disclosure agreement (NDA)](https://contracko.com/glossary/nda)
- [Data processing agreement (DPA)](https://contracko.com/glossary/data-processing-agreement)
- [Intellectual property](https://contracko.com/glossary/intellectual-property)

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## Frequently asked questions

Common questions about this term.

- **Q:** Does information stay confidential forever?
  **A:** Usually not. Contracts set a fixed term, and the duty typically lapses once information lawfully becomes public. Genuine trade secrets can be protected for as long as they stay secret.

- **Q:** What is the difference between a trade secret and confidential information?
  **A:** A trade secret is a subset of confidential information that meets specific criteria under the Trade Secrets Directive: it is secret, has commercial value because of its secrecy, and reasonable steps have been taken to keep it secret. These get statutory protection; ordinary confidential information relies on contract.

- **Q:** Can you protect confidential information without a written contract?
  **A:** Partly. Dutch law imposes some pre-contractual good-faith obligations, and trade secrets get statutory protection under the Wbb. However, a written NDA provides far clearer scope, remedies, and evidence, and is strongly advisable before any sensitive disclosure.

- **Q:** What remedies are available for a breach of confidence?
  **A:** Damages, an injunction to stop further disclosure or use, and account of profits. For trade secrets, the Wbb also allows confiscation of infringing goods. The key challenge is usually proving the breach and quantifying loss.

- **Q:** Does the duty of confidentiality survive termination of the contract?
  **A:** Only if the contract says so, or if the information qualifies as a trade secret. Always include a survival clause specifying that confidentiality obligations continue for a defined period after termination.

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