Types of Contracts

There are two main types of contract or 'agreement' in business generally; confidentiality and exclusivity.

Companies have all sorts of information. It could be plans for a new product, details on their bigger customers or information about their staff. All companies have important papers that they don't want falling into the wrong hands. This is where the confidentiality contract comes in.


A confidentiality agreement (also known as a non-disclosure agreement) is a standard written contract that is initiated when two companies start working together. It represents a confidential relationship that exists between the two parties. Any individual that may have or have access to sensitive information is usually required to sign a confidentiality agreement which is generally a clear indication that the information presented is private. This form of agreement is often used as an incentive to build trust between the companies present in the agreement and is generally used in strategic meetings and legal battles. The information contained within a confidentiality agreement should not be made available to the public in any shape or form as it would breach the contract and could potentially make the partnership null void.


Companies also like to keep things to themselves. They might want to join with a large supply chain, maybe liaise with another company or strengthen a relationship that was already there, at the exclusion of others. Companies want to protect their assets, which is what the exclusivity contact is for.


An exclusivity agreement (also known as the shut out agreement) is what ties two or more companies together in mutual benefit. This type of contract ensures that the companies involved maintain dealings only with each other in their selected area of business. It could be described as more of a commitment than a purely business move, it could show a preference to the chair of the company or maybe just general interest in the business as a whole. This kind of agreement can stabilize a business in the sense that everyone knows where they stand and what they can and cannot do. It can also make the market more predictable and equally releasing some of the strain on both parties involved as it shuts out the competition. As each party enters the exclusivity agreement they will learn more and more about the other party's sensitive data, which would be very valuable to a 3rd party. Therefore this form of contract also stipulates terms like access to data, confidentiality and termination, namely if one of the companies leaked information to a 3rd party source then a legal battle could ensue which may result in the company's downfall.