Which clause in a business contract typically ensures that parties cannot disclose sensitive information?

A confidentiality clause is essential in a business contract as it specifically addresses the need for parties to keep sensitive information private. This clause clearly outlines what constitutes confidential information, the obligations of the parties to protect that information, and the consequences for any breaches of this duty. By including a confidentiality clause, the parties agree not to share or disclose proprietary information, trade secrets, or any other sensitive data that could harm the interests of the business if it became public or reached competitors.

In contrast, a non-compete clause restricts one party from engaging in competing business activities for a specified period after the termination of the contract. An arbitration clause refers to the resolution of disputes outside of court, and a termination clause stipulates the conditions under which the contract can be ended. While these clauses serve important functions within contracts, they do not specifically focus on the protection of sensitive information, which is the primary purpose of a confidentiality clause.