Non-Disclosure Agreement (NDA)

Make sure that your proprietary information is confidential and protected with you. Get your Non-Disclosure Agreement drafted today from our seasoned lawyers at a very affordable price. Before disclosing any information about your business idea to anyone, do not forget to have the most important legal document with you i.e. an NDA!

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INTRODUCTION

What is a Non-Disclosure Agreement (NDA)?

If you own a business, you might have come across the term Non-Disclosure Agreement. A Non-disclosure Agreement or an NDA is a legal agreement that ensures the confidentiality of the data you share with others. An NDA gives you legal protection making sure people who have access to your confidential data don’t misuse it. It comes in handy when you are disclosing your business’s confidential and proprietary information to others, which, as an entrepreneur, you might often do.

Likewise, other businesses (with whom you are or likely to do business) might share their confidential information with you and may ask you to sign an NDA agreement. Hence, it becomes important that you know the nuances surrounding an NDA agreement.

Some instances where you require a Non-Disclosure Agreement.

A Non-Disclosure Agreement is the most commonly used legal document by businesses because a wide gamut of confidential information is exchanged every day between businesses on a large scale basis. Some important and common instances where you would need an NDA agreement are:

Investors

During discussions with the investors at the time of raising funds.

Third Parties for business collaborations

At the time of sharing confidential information with third parties for business partnerships.

Employees and FreeLancers

When you share your confidential and proprietary data with your employees or a freelancer.

Professional Advisors

Disclosure of information while taking professional consultancy.

BENEFITS

Why should one get a Non-Disclosure Agreement?

Information that is personal to the business, which is not available in the public domain, should be protected with the help of a Non-Disclosure Agreement. Source code for a Software company, customer data for an e-commerce business, or information about an invention by a company are some examples of confidential information.

Here are a few benefits of having an NDA Agreement :

Protection of Proprietary Information – Businesses’ confidential and proprietary information cannot be shared with third parties without permission, and hence will minimize the risk of any likely losses.
Maintaining confidentiality – Parties are very clear from the beginning about what constitutes confidential and what needs to be held in secrecy.
Binding Legal Agreement – An NDA agreement is a binding legal agreement and hence parties have a legal remedy if the terms of the contract are not complied with, or there is any breach of the clause by either of the parties.
Protect Intellectual Property rights- NDA agreement protects your intellectual properties from unauthorized usage and leak.
Secure third party obligations – This agreement helps to safeguard sensitive third party information from disclosing it with anyone else.

What cannot be covered under confidential Information?

The information that is very common and available in the public domain can not be covered.
Information already known to either party before entering into any agreement can’t be covered.
Facts disclosed by the third party who has a right to reveal such information without any compulsion of hiding it.
Data developed by employees, affiliates or any agents of the other party independently can’t be included.

What should a Non-Disclosure Agreement include?

Definition of Confidential Information: It is important to clearly define what constitutes confidential information to avoid any disputes in the future. Ideally, confidential information is given a very broad definition to cover almost all possible confidential and proprietary information that one is likely to share with the other.

What is not confidential information: Not all information that is shared with others is confidential and that should be clearly laid out in the agreement.
Permissible disclosure by Third-party: When can confidential information be shared, and to whom should also be clearly stated in an NDA agreement.
Term and termination: It is important to define the duration of the obligations under an NDA. Duration could be anything between 2-10 years or could be infinite as well.
Governing law and jurisdiction: It is important to clearly state the governing law and jurisdiction, especially where two parties are coming from separate countries. In the event of any disputes arising out of an NDA agreement, a case can be filed in the court falling in the specified jurisdiction.

FAQs

Frequently Asked Questions

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What is the purpose behind entering into a Non-Disclosure Agreement (NDA)?

An NDA agreement helps you in protecting the confidential information that you are sharing with third parties. It helps create a trust that your confidential information will not be spilled out without your consent and ensures you have a legal remedy in the event it is.

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Who can enter into a Non-Disclosure Agreement?

Parties who are capable of entering into a contract as per the Indian Contract Act, 1872 can sign an NDA.

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How many times can I use a Non-Disclosure Agreement?

You can use the draft of the NDA agreement with as many parties and as many times as you wish to. Every time you enter into an NDA with a different party, you may have to make minor changes in the name of the parties and category of confidential information.

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What is confidential information in a Non-Disclosure Agreement?

Confidential Information includes all the details that you think are confidential and proprietary to your business which, if disclosed to third parties without your knowledge, is likely to cause losses to you or your business.

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Is a Non-Disclosure Agreement legally binding?

Yes, an NDA agreement is a legally binding document and parties can file a suit in the event of any breach of any of its terms.

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Is it mandatory to have a Non-Disclosure Agreement printed on stamp paper and does it require a notary?

It is not mandatory but advisable to get a stamp paper for an NDA agreement to ensure the validity and existence of the document. An NDA does not require a notary.

Simpler. Quicker. Better.

How can LegalWiz.in help you in drafting a Non-Disclosure Agreement?

Our Experienced professionals at LegalWiz.in can help you draft a custom NDA agreement based on your business needs. Lawyers at Legalwiz can also review an NDA agreement that you receive from others. All you need to do is convey to our experts the purpose behind having an NDA agreement and they will take care of the rest.