How to Draft a Non-Disclosure Agreement (NDA) in India

What Is an NDA?

A Non-Disclosure Agreement (NDA), also called a confidentiality agreement, is a legally binding contract that restricts parties from sharing confidential information with third parties. In India, NDAs are governed by the Indian Contract Act, 1872.

Types of NDAs

Unilateral NDA

One party (the disclosing party) shares information with another (the receiving party), who agrees not to disclose it. Common in employment, freelancing, and vendor relationships.

Mutual NDA

Both parties share confidential information with each other and agree to keep each other's secrets. Common in joint ventures and mergers.

Essential Clauses in an Indian NDA

1. Definition of Confidential Information

Be specific. Define what constitutes confidential information — business plans, financial data, source code, customer lists, trade secrets, etc. Vague definitions weaken the NDA.

2. Exclusions from Confidentiality

Information that is already public knowledge, independently developed, or required to be disclosed by a court order is typically excluded.

3. Obligations of the Receiving Party

Clearly state that the recipient must:

• Not disclose information to third parties
• Use it only for the stated purpose
• Protect it with the same care they use for their own confidential data (standard of care)

4. Duration

NDAs in India typically last 2–5 years. However, trade secrets may warrant indefinite protection. Courts have upheld reasonable durations.

5. Consequences of Breach

Specify remedies — including injunctive relief (stopping the breach) and liquidated damages (a pre-agreed monetary penalty).

6. Jurisdiction and Governing Law

Always specify that the agreement is governed by Indian law and name the city/court with jurisdiction.

Is Your NDA Enforceable in India?

Under Section 27 of the Indian Contract Act, agreements that restrain trade are generally void. This means:

• Non-compete clauses embedded in NDAs are hard to enforce post-employment.
• However, confidentiality obligations *during* employment are fully enforceable.
• Post-employment non-disclosure of trade secrets is enforceable if the duration and scope are reasonable.

Key takeaway: Focus your NDA on protecting specific confidential information, not broadly restricting the other party's career or business.

NDA vs. Non-Compete

Conclusion

An NDA is your first line of defense when sharing sensitive business information. Generate a court-ready NDA on Kanoonseva — customised for your industry, compliant with Indian law, and ready to sign.