In a world where people are constantly connected and oversharing, people still like having a sense of privacy and keeping things confidential. Whenever I file patent applications for my clients, I often get asked "Should I have an NDA?" My feeling is, if you want to keep things confidential between you (the disclosing party) and the other person (the receiving party), then yes, you should execute an NDA.
But if you don't have an NDA and instead another type of a contract, what can you do? You can insert a confidentiality clause.
What is a confidentiality clause and when is it appropriate to use?
A confidentiality clause is a section in a contract that basically says that the terms of the contract are confidential and defines what "confidential information" is. A confidentiality clause is included in a variety of contracts, including licensing agreements, employment contracts, purchasing agreements, and other contracts.
Usually confidential information comprises information that is proprietary to the disclosing party, and other information that the disclosing party values. But this definition can be ambiguous and very subjective. So it's important to clearly outline what confidential information is. If you're disclosing information about your invention, then say that the confidential information is information relating to the invention. Then the details of the invention would be considered confidential.
The fact that the terms of the contract and "confidential information" cannot be disclosed is important to distinguish from the fact that the existence of the contract is not confidential. This means that you can tell someone that you have an existing contract with so and so, but you can't say what the terms of the contract are and disclose the confidential information as defined in the contract.
Keep in mind though that the terms of the contract may be disclosed under limited conditions, such as when required by law or court order, or after the information is already disclosed under other circumstances by a third party (e.g., when a utility patent application is published). This is a pretty standard thing so don't feel like you're giving a lot away by including a provision like this. Also, you can require the receiving party to notify the disclosing party: 1) what information is going to be disclosed; 2) when the information is going to be disclosed; 3) why the information is going to be disclosed; and 4) to whom the information is going to be disclosed. This way you have some heads up as to when the confidential information is going to be disclosed.
Is a confidentiality clause right for your contract? In my opinion, it doesn't hurt to add. Even if you're not disclosing any proprietary information, the terms of the contract remain confidential between you and the other party so if you don't want other people to find out the conditions under which you and the other party agreed then you should strongly consider a confidentiality clause.