Confidentiality Agreement. A confidentiality agreement is a "first date" agreement.. Often the two parties have had little business dealings with each other prior and the purpose of the discussions is to determine whether there is a mutual interest in what is being discussed. Note however that it is just as necessary to have a confidentiality agreement when the parties know each other well. Discussions under confidentiality allow the information receiving party to stay "Stop, let's not take this discussion further as I am already doing what you are disclosing to me".
Thus, a document (the letter of intent) that the parties had started out viewing as non_binding and unenforceable, had changed from being that, to being a final agreement! Pennzoil, on the other hand, ended up with บǒ billion (later settled for ū billion) from Texaco for interfering in its deal with Getty Oil.