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Clause

Confidentiality

The clause that says what the adviser may do with your technical and financial information: who they can pass it to, what they can say about you, and for how long the promise lasts.

This page explains a common clause in general terms. It is not legal advice, and contract law differs between countries. Ask a lawyer to review your own engagement letter.

Sample clause

Written for this guide, not from any real contract

1 Each party will keep the other's confidential information confidential and use it only for the purposes of this engagement. 2 We may disclose the Client's information to subcontractors who have agreed to equivalent obligations, 3 and to the tax authority as required for the Claim. 4 We may refer to the Client as a client in our marketing materials. 5 These obligations continue for five years after the engagement ends.

  1. Mutual, and limited to the engagement. A clause that binds only you is worth asking about.
  2. Subcontractors. Ask who they are and whether their promise to you is in writing.
  3. The tax authority. Necessary for the claim; check that it is limited to what the claim requires.
  4. Your name in their marketing. Ask for this to need your consent each time.
  5. Duration. A fixed period can end while your information is still sensitive.

What it means in plain English

To prepare a claim, the adviser sees your project records, your payroll and your plans. This clause says what they may do with that. In the sample, both sides promise to keep each other's information confidential and to use it only for the engagement; the adviser may pass your information to subcontractors who have made the same promise, and to the tax authority for the claim; the adviser may name you as a client in its marketing; and the promise lasts for a set period after the engagement ends.

Two of those are worth a second look. Subcontractors are people you have not met and have no contract with. Being named as a client is a small thing to many businesses and a large one to some.

What to look for

A version that is easy to live with binds both sides equally, names the purposes the information may be used for, requires any subcontractor to be under the same obligations and tells you who they are, asks your permission before naming you in marketing, and runs for as long as the information stays sensitive rather than a fixed short period.

A version to ask more about binds only you, lets the adviser share your information with "associated businesses" or "partners" without saying who, allows marketing use without consent, or ends the obligation on a date while the information is still valuable. If an introducer was involved, this is also the place to ask what was shared with them and whether anyone was paid for the introduction.

Contract law differs by country, and so does what a letter can and cannot do. Ask a lawyer to review your own letter before you sign it.

Questions to ask

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