Gag Agreement Meaning

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  • Added: May 27, 2023

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Gag Agreement Meaning: Understanding the Basics

A gag agreement, also known as a non-disclosure agreement (NDA), is a legally binding document that restricts individuals from sharing certain information with the public. This type of agreement is mostly used in business settings where confidential information is shared between parties.

The purpose of a gag agreement is to ensure that sensitive information is kept private, and any disclosure of such information will result in legal consequences. In most cases, a gag agreement is signed by employees, contractors, or anyone who has access to confidential information.

The contents of a gag agreement may vary depending on the nature of the information being protected. However, a typical gag agreement outlines the following:

1. The definition of confidential information – this section defines what is considered confidential information. It could include trade secrets, financial information, customer data, or any other information that is not meant for public consumption.

2. Non-disclosure clause – this section prohibits the signee from disclosing any confidential information to third parties without prior consent. It also covers any unintended disclosure of information and outlines the consequences of such an event.

3. Term of the agreement – this section stipulates the duration of the gag agreement. It could be a few months, years, or until the information is no longer considered confidential.

4. Exclusions – some gag agreements have exclusions. These are instances where the signee is allowed to disclose the information without breaching the agreement. For example, if the information is required by law or court order, the signee may be exempted from the non-disclosure clause.

5. Remedies – this section outlines the legal remedies available to the parties in case of a breach of the gag agreement. The remedies could include monetary damages, an injunction, or any other legal action deemed necessary.


In summary, a gag agreement is a legal document that aims to protect confidential information from disclosure. It is a crucial tool in ensuring that businesses can operate without the threat of sensitive information being leaked to the public. If you are required to sign a gag agreement, it is essential to read and understand all its contents before signing. Failure to adhere to the gag agreement may result in significant legal consequences.