Why is discussion of a data confidentiality agreement necessary for enterprises?

In the context where information has become a critical asset, developing and discussing a data confidentiality agreement enables enterprises to proactively prevent risks and protect trade secrets, customer data, and internal information. A clear agreement not only establishes a legal basis for handling violations but also enhances the accountability of employees, suppliers, and business partners, while increasing transparency, security, and trustworthiness in information management.

I. The impact of discussions on data confidentiality agreements on enterprises

Discussions on data confidentiality agreements directly affect an enterprise’s ability to protect sensitive information and business interests. Clear discussions regarding rights, obligations, and the scope of data usage help minimize the risks of data leakage, loss, or misuse.

At the same time, thorough discussions establish a solid legal foundation for dispute resolution and protection of rights in the cases of violations. Therefore, discussions on data confidentiality agreements not only ensure information security but also enhance the reputation and trust of partners and customers.

II. Understanding discussions on data confidentiality agreements

1. What are discussions on a data confidentiality agreement?

Discussions on a data confidentiality agreement refer to the process whereby relevant parties (including enterprises and their partners, employees, or suppliers) exchange views and reach consensus on provisions relating to the protection of sensitive information. The purpose of such discussions is to clearly define the types of confidential data, the scope of use, the rights and obligations of each party, the confidentiality period, and measures for handling violations. These discussions help minimize legal risks, protect business interests, and establish a solid legal basis in the cases of disputes.

2. What information is commonly addressed in discussions on a data confidentiality agreement?

In discussions on a data confidentiality agreement, the parties commonly focus on and agree upon the following important matters:

• Types of confidential data: Clearly identifying sensitive information, including trade secrets, customer data, technology, marketing plans, financial information, and related matters.
• Scope of data usage: Defining who is authorized to access and use the data and for what work-related purposes.
• Confidentiality period: Determining the duration for which the data must remain protected and how it will be handled after the expiration of the agreement.
• Rights and obligations of the parties: Confidentiality commitments, liability for breaches, and rights to inspect and supervise compliance.
• Measures for handling violations: Forms of compensation, disciplinary measures, or legal actions if data is disclosed or used for improper purposes.

3. What factors should be considered when discussing a data confidentiality agreement?

When discussing a data confidentiality agreement, the parties should pay attention to the following important factors to ensure the effectiveness and legal enforceability of the agreement:

• Clearly defining the scope of data: Precisely identifying the types of information requiring protection to avoid ambiguity and disputes.
• Rights and obligations of the parties: Reaching agreement on confidentiality responsibilities, rights of inspection and supervision, and remedies for violations.
• Confidentiality period and conditions: Determining the period during which the data must be protected and methods for handling the data after termination of the agreement.
• Remedies for violations: Clearly specifying compensation levels, sanctions, or legal proceedings in case either party breaches the agreement.
• Legal basis and evidence: Preparing all relevant legal regulations and evidence necessary to protect rights and interests in the cases of disputes.

4. Why are discussions on a data confidentiality agreement necessary for both participating parties?

Discussions on a data confidentiality agreement are an important step in ensuring clear rights and obligations for both parties. Through such a process, enterprises can accurately identify sensitive data requiring protection, define the scope of use, and determine remedies for violations, while partners or employees gain a clear understanding of their confidentiality obligations and authority.

Main benefits include:

• Minimizing the risks of data leakage, loss, or misuse;
• Establishing a solid legal basis for resolving disputes in the cases of violations;
• Enhancing trust and cooperative relationships between the parties.

III. Legal regulations related to discussions on data confidentiality agreements

1. How does Vietnamese law regulate discussions on data confidentiality agreements?

The discussion and execution of data confidentiality agreements in Vietnam are not governed by a separate statute but are protected and regulated by various existing legal instruments, including:

• Law on Personal Data Protection 2025 (Articles 15 and 16): Parties discussing confidentiality agreements relating to personal data must ensure that the collection, processing, and protection of personal data comply with legal requirements, including obtaining clear consent from data subjects and applying strict security measures.
• Commercial Law 2005 (Clause 4, Article 78): Requires parties to keep confidential information obtained during the provision of services where confidentiality has been agreed upon or prescribed by law.
• Law on Intellectual Property 2005 (as amended and supplemented in 2009, 2019, and 2022) (Articles 84 and 128): It protects trade secrets and intellectual property rights; information is considered a trade secret if it has commercial value, is not publicly available, and has been protected by reasonable measures by its owner. Violations may lead to legal actions to protect business interests.
• Labor Code 2019 (Clause 2, Article 21): Employees working directly with trade secrets or technology may enter into written agreements with employers regarding confidentiality obligations and compensation liability in case of breaches.

Although Vietnam does not yet have a separate law specifically regulating “discussions on data confidentiality agreements” (NDAs), the process of exchanging, discussing, and entering into confidentiality agreements is protected under various current laws.

2. How may a party be handled if they fail to comply with the terms discussed in a data confidentiality agreement?

Where a party breaches the terms of a data confidentiality agreement, Vietnamese law and the executed agreement permit the application of various remedial measures:

• Compensation for damages: Pursuant to Article 584 of the Civil Code 2015, any person causing damage through infringement upon property, property rights, or lawful interests of another person must compensate for all damages incurred. Where an employee discloses, copies, appropriates, or unlawfully uses company data, the enterprise is entitled to claim compensation for financial losses, remedial costs, lost business opportunities, and other damages arising from the disclosure. The Court may also apply civil remedies requiring the violating party to cease the infringing acts, return or destroy unlawfully obtained data, refrain from further use of the data, and fulfill obligations arising from the agreement in order to maximally protect the company’s lawful rights and interests.
• Disciplinary measures or termination of employment contracts (Article 125 of the Labor Code 2019): Where the violation is committed by an employee, the employer may impose disciplinary sanctions, temporary suspension, or dismissal if the employment contract contains provisions on data confidentiality.
• Criminal measures (in serious cases): If the acts of data theft, disclosure of trade secrets, or unlawful appropriation of information cause significant damage and satisfy the elements of a criminal offense, criminal liability may be imposed under Article 288 (Illegal Provision or Use of Information on Computer Networks or Telecommunications Networks) and Article 289 (Illegal Access to Computer Networks, Telecommunications Networks, or Electronic Means of Others) of the Criminal Code 2015.

3. What are the methods for resolving disputes related to discussions on data confidentiality agreements?

When disputes arise relating to data confidentiality agreements, the parties may resolve them through various methods depending on the contractual agreement and applicable legal regulations. Pursuant to Article 317 of the Commercial Law 2005, dispute resolution methods include:

• Negotiation and settlement: It is the initial and commonly encouraged step, enabling the parties to seek amicable solutions while reducing costs and time.
• Commercial arbitration: If the agreement contains an arbitration clause, the parties may submit the dispute to an arbitration center for resolution, ensuring that the arbitral award has binding legal effect.
• Civil courts: Where negotiation fails or there is no arbitration agreement, the parties may initiate legal proceedings before a competent court to request contract performance, compensation for damages, or prevention of data disclosure.
• Interim protective measures: During the dispute resolution process, the aggrieved party may request the court to apply interim measures such as prohibiting the use, disclosure, or copying of the data.

IV. Questions relating to discussions on data confidentiality agreements

1. Must discussions on data confidentiality agreements be conducted in writing, or can they also be made orally?

Currently, there is no mandatory legal requirement regarding the form of discussions on data confidentiality agreements; therefore, both oral and written discussions are legally recognized.

However, written agreements are strongly recommended because they allow the parties to clearly record their rights, obligations, and agreed terms, while also serving as solid legal evidence in the event of disputes.

2. What risks may arise if there is no clear discussion on a data confidentiality agreement?

If there is no clear discussion regarding a data confidentiality agreement, the parties may face several significant risks, including:

• Data leakage or loss: Sensitive information may be misused by employees or partners or disclosed to external parties.
• Legal disputes: Without clear agreements, determining liability and handling violations becomes difficult, potentially leading to lawsuits or prolonged disputes.
• Loss of reputation and trust: Enterprises may suffer reputational damage if important information is disclosed or improperly used.
• Financial risks: Unauthorized use of data may cause economic losses, loss of business opportunities, or legal penalties under applicable laws.

3. How can the parties ensure that the terms discussed in a data confidentiality agreement are properly implemented?

To ensure that data confidentiality provisions are properly implemented, the parties should adopt the following measures:

• Preparing a clear written agreement: Recording in detail the rights and obligations of the parties, the scope of confidential data, confidentiality periods, and liabilities for violations.
• Establishing internal control mechanisms: Supervising access to, use of, and sharing of data through measures such as authorization controls, data encryption, and access logs.
• Conducting periodic reviews and updates: Regularly reviewing the agreement’s provisions to ensure consistency with technological developments, business processes, and applicable laws.
• Including remedies for violations in the agreement: Clearly defining legal consequences, compensation obligations, or sanctions in case of breaches to ensure enforceability.

4. If one party refuses to participate in discussions on a data confidentiality agreement, what should the remaining parties do?

Where one party refuses to participate in discussions on a data confidentiality agreement, the remaining parties should take the following steps:

• Issuing a formal notice: Sending a written notice requesting the refusing party to explain its reasons and emphasizing the importance of the confidentiality agreement for the common interests of all parties.
• Renegotiating or continuing discussions: Seeking alternative solutions and adjusting the scope or provisions of the agreement to accommodate the interests of all parties involved.
• Recording and retaining all communications: Even if no agreement is reached, the parties should preserve all communications, proposals, and responses as legal evidence in case disputes arise in the future.
• Considering the feasibility of cooperation: If the refusing party continues to obstruct the process, the remaining parties may consider suspending or refraining from entering into cooperation until a clear confidentiality agreement is reached.

5. If discussions on a data confidentiality agreement are unsuccessful, what steps can the parties take next?

In practice, not all discussions on data confidentiality agreements result in a successful agreement. In such cases, the parties should consider the following steps:

• Renegotiating or engaging a mediator: Involving lawyers, legal experts, or third-party mediators to clarify provisions and seek reasonable solutions.
• Applying temporary protective measures: Establishing technical and internal management mechanisms to protect important data and minimize risks of unauthorized disclosure or use.
• Executing separate agreements: If a comprehensive agreement is not feasible, the parties may enter into smaller agreements with limited confidentiality scope based on specific projects or categories of data.
• Assessing the possibility of continued cooperation: If a party refuses to cooperate, the remaining parties should consider suspending or terminating cooperation to protect their rights and data.

V. Are you looking for a reputable legal expert to assist with issues relating to discussions on data confidentiality agreements?

If you require comprehensive advice on drafting, negotiating, or resolving disputes relating to data confidentiality agreements, NPLaw is a reliable choice. With a team of experienced lawyers specializing in corporate law, intellectual property, and contractual matters, NPLaw is committed to protecting your rights and interests in a transparent and professional manner.

The above information is provided for reference purposes only. Should you require consultation regarding a specific case, please contact NPLaw for immediate legal assistance.