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Confidential relationships refer to a relationship in which one person has a duty to the other not to disclose proprietary information. It is one that is founded upon secrecy and trust. The duty of secrecy in such a relation is intended to prevent undue advantage that might stem from the unlimited confidence that one party places in the other.
A confidential relationship can be expressly established, as by the terms of an employment contract. It can also be implied when one person knows or should know that the information is confidential, and the other person reasonably believes that the first person has consented to keep the information confidential. For example, two people negotiating the sale of a business.
Common examples of confidential relationships, which give rise to confidential communications, include attorney and client, husband and wife, and physician and patient.