Covert Agreement Definition

Covert Agreement Definition: Understanding the Legal Terminology

The term „covert agreement” is not a commonly used legal term. However, it can have significant legal implications for businesses and individuals. In this article, we will define and explain the meaning of „covert agreement” and how it can affect you or your organization.

What is a Covert Agreement?

A covert agreement refers to an agreement or contract that is made secretly or without the knowledge of one or more parties involved. It can also refer to an agreement that is intentionally designed to deceive or mislead one or more parties. In either case, a covert agreement is considered to be an illegal and unethical practice.

Examples of Covert Agreements

There are various examples of covert agreements that can occur in different situations. For instance, an employee may make an agreement with a competitor to provide confidential information about their current employer in exchange for financial benefits. In this case, the employee is acting secretly and without the knowledge of their employer, which makes it a covert agreement.

Another example of a covert agreement is when a group of vendors collude to restrict competition in a particular market or to fix prices. This type of activity is illegal and can lead to severe consequences for those involved.

Legal Implications of Covert Agreements

Covert agreements are usually considered to be illegal and unethical, and they can lead to significant legal consequences. In most cases, these agreements are in violation of antitrust laws, which are designed to promote fair competition and protect consumers from price-fixing practices.

Violations of antitrust laws can result in significant fines and penalties for individuals and businesses involved in such activities. In addition, legal action can be taken against those who are found to have entered into covert agreements, resulting in loss of reputation, credibility, and even imprisonment.

Protecting Yourself Against Covert Agreements

It is essential to take proactive steps to protect yourself or your organization against covert agreements. Firstly, it is crucial to have a clear understanding of what constitutes a covert agreement and how it can impact your business.

Secondly, it is vital to review and understand all contracts and agreements that you or your organization enters into, ensuring that there is transparency and fairness in the negotiation process.

Lastly, it is always best to consult with a qualified legal professional who can advise you on the legal implications of any agreements or contracts you are considering.


In conclusion, a covert agreement is an illegal and unethical practice that can have significant legal implications for individuals and businesses. It is vital to understand what constitutes a covert agreement and take proactive steps to avoid any involvement in such activities. By working with legal professionals and ensuring transparency and fairness in all agreements, you can protect yourself and your organization against the risks and consequences of covert agreements.