The Importance of Confidentiality Agreements

In today’s competitive business environment, confidential information is one of the most valuable assets a company possesses. Trade secrets, customer databases, strategic plans, technical designs, and other sensitive know-how are often the foundation of a company’s market advantage. The loss or misuse of such information may result in reputational harm, financial loss, or the erosion of competitiveness. Protecting confidential information is therefore not only a commercial necessity but also a legal obligation under Turkish law.¹

The most effective way to ensure this protection in the course of negotiations, collaborations, or investment discussions is by entering into a confidentiality agreement (Non-Disclosure Agreement – NDA). By signing an NDA, the parties clearly define what qualifies as confidential, how such information may be used, and the consequences of a breach. This framework strengthens legal protection and provides evidentiary advantages in the event of disputes.²

However, the existence of an NDA does not mean that protection is exhausted. Even in the absence of a written agreement, Turkish law provides remedies. Article 55 of the Turkish Commercial Code (Law No. 6102) classifies a number of acts as unfair competition, including:

• the unauthorized use of entrusted proposals, calculations, or plans,

• benefiting from third-party business materials that were provided without authorization,

• exploiting ready-to-market products through technical reproduction methods,

• and the unlawful disclosure of trade or business secrets.³

In such cases, the affected party may bring civil actions for prevention, removal of consequences, and compensation of material or moral damages (Articles 56–58 TTK). Furthermore, those who intentionally commit unfair competition acts may face criminal sanctions. Article 62 of the Turkish Commercial Code stipulates that intentional acts of unfair competition are punishable by up to two years of imprisonment or a judicial fine.⁴

In conclusion, while general legal safeguards exist even without an NDA, entering into a confidentiality agreement significantly strengthens protection. It not only delineates the scope of confidential information but also allows for additional remedies such as penalty clauses, thereby providing a stronger and more transparent framework for business relationships.

References

• ¹ Turkish Commercial Code (Law No. 6102), Articles 54–55; Turkish Penal Code (Law No. 5237), Articles 239–240 (regarding trade secrets).

• ² NDA practice under Turkish law is not codified but widely recognized in commercial transactions.

• ³ Turkish Commercial Code, Article 55/1(c–d).

• ⁴ Turkish Commercial Code, Article 62.