Non Disclosure Agreeement (NDA)

India’s #1 Incorporation Service – 125 Companies Incorporated in 2012 alone

NDA and its need• One needs an NDA when is sharing any confidential

information or data with another party, an NDA helps one to

protect and safeguard the confidential information.

• A non disclosure agreement ensures that an employee does

not disclose any information obtained by him in capacity as an

employee. Whereas, a non compete agreement ensures that

an employee doesnt compete with the employer, by opening or

pursuing a similar business after the employee's term of

employment with the employer.

NDA and its need (contd.)

• An NDA can be obtained for different kinds of

confidential information, including sketches,

drawings, business plans and strategies, software

programs and other confidential information.

• The terms in a non-disclosure agreement can be

included in an employment contract as a clause.

• Multiple NDAs can be signed with the same person,

on different subjects. The process for each NDA

would remain the same.

Legal value of an NDA?

• An NDA is a binding legal contract between

the parties. If either of the parties to an NDA

violates the NDA, the other side is entitled to

damages in the form of compensation for the

loss caused

Violation of NDA by other party

• In case of violation of NDA by other party

following steps should be taken:

• First, one should send the other side a legal notice

clearly stating ones grievance and declare that unless

the issue is resolved, one will take legal action.

• After sending a legal notice, if one does not get any

result, then one needs to file a court case. But in most

cases, one gets relief after sending a legal notice.

NDA and legal formalities• Ideally, an NDA should be on Stamp Paper, but even

if it is printed on the letter-head of your Company /

Firm, it is admissible in the court of law.

• An NDA does not have to be registered.

• Notarization is not legally necessary, however, if the

NDA is notarized, then in case a dispute arises with

regard to the NDA, it is easy to substantiate ones

case in a court of law. The costs for notarization

however vary from city to city.

Termination of NDA

• NDA is valid perpetually, until one decides to end it. One can

also mention the exact period for which one wants the NDA to

be valid while filling up the form on the website.

• Typically, every NDA contains a provision that even post the

termination of the NDA, the confidential information will

continue to be protected for a fixed period or forever. This

period can range from few months, to 1 or 2 years or more. It

is on the Client's choice. In the meantime, one should try to

get the information back from the party or insist that they

destroy the information.

Non-circumvent agreement v/s NDA

• A non circumvent agreement ensures that the role of

an intermediatory party is not surpassed by the

other two or more parties to an agreeement, in the

future. Whereas, a non disclosure agreement

ensures that a party does not disclose any

information to a third party.