Draft Non-Disclosure Agreement (NDA) Under Indian Law

FREQUENTLY ASKED QUESTIONS:

What is a Non-Disclosure Agreement (NDA)?
A Non-Disclosure Agreement (NDA) is a legally binding contract in which one or both parties agree to keep certain information confidential and not disclose it to others.
Is an NDA legally enforceable in India?
Yes. An NDA is legally enforceable in India if it complies with the Indian Contract Act, 1872, and contains lawful, reasonable, and clear confidentiality obligations.
When should an NDA be signed?
An NDA should be signed before sharing confidential information, such as during business negotiations, employment discussions, consultancy projects, or startup collaborations.
What types of information are protected under an NDA?
An NDA protects business strategies, financial data, trade secrets, client details, software code, designs, and any proprietary or confidential information shared for a specific purpose.
What are the essential clauses of an NDA?
Key clauses include the definition of confidential information, purpose of disclosure, confidentiality obligations, exclusions, term, remedies for breach, and governing law.
How long does an NDA remain valid?
The validity period depends on the agreement. Typically, NDAs last 2 to 5 years, and confidentiality obligations may survive even after the agreement ends.
What happens if an NDA is breached?
If an NDA is breached, the affected party may seek injunctions, damages, arbitration, or other legal remedies under Indian law.
Is stamp duty required for an NDA in India?
Yes. Stamp duty may apply depending on the state and nature of the NDA. An unstamped or insufficiently stamped NDA may face enforcement issues in court.
Can an NDA restrict future employment or business?
An NDA cannot impose unreasonable restrictions on trade or employment. It can only protect confidential information, not prevent lawful professional activity.
What is the difference between an NDA and a confidentiality agreement?
There is no major difference. “Non-Disclosure Agreement” and “Confidentiality Agreement” are often used interchangeably, though NDAs are more common in commercial use.

DRAFT:

NON-DISCLOSURE AGREEMENT (NDA)

This Non-Disclosure Agreement (“Agreement”) is made and entered into this 22nd day of December, 2025,

BY AND BETWEEN:

[Full Legal Name of Disclosing Party], a [Company/Individual] having its registered office/address at ____________________ (hereinafter referred to as the “Disclosing Party”)

AND

[Full Legal Name of Receiving Party], a [Company/Individual] having its registered office/address at ____________________ (hereinafter referred to as the “Receiving Party”)

The Disclosing Party and the Receiving Party are hereinafter collectively referred to as the “Parties” and individually as a “Party.”

Purpose
The Disclosing Party intends to disclose certain confidential and proprietary information to the Receiving Party solely for the purpose of [Insert Specific Project/Collaboration Name, e.g., evaluating a partnership for software development] (the “Purpose”).
Definition of Confidential Information
“Confidential Information” includes all information disclosed by the Disclosing Party, whether oral, written, electronic, or visual, including but not limited to:
1. Business strategies, plans, models, and proposals.
2. Financial data, pricing, revenue, and cost structures.
3. Technical data, software, source code, designs, and algorithms.
4. Trade secrets, know-how, and intellectual property.
5. Client, customer, vendor, and partner information.
6. Any information disclosed before or after the execution of this Agreement.
Obligations of the Receiving Party
The Receiving Party shall:
1. Maintain Secrecy: Maintain strict confidentiality of the Confidential Information using no less than a reasonable degree of care.
2. Limited Use: Use the Confidential Information only for the stated Purpose.
3. Prohibit Disclosure: Not disclose Confidential Information to any third party without prior written consent (which may be granted via email).
4. Notice of Breach: Notify the Disclosing Party in writing within 24 hours of discovering any unauthorized use or disclosure of Confidential Information.
Exclusions from Confidential Information
Confidential Information does not include information which:
1. Is or becomes publicly available without breach of this Agreement.
2. Was lawfully known to the Receiving Party prior to disclosure.
3. Is lawfully obtained from a third party without restriction.
4. Is independently developed without reference to the Confidential Information.
Confidentiality of Existence
The Receiving Party shall not disclose the existence, terms, or subject matter of this Agreement or the fact that discussions are taking place without the prior written consent of the Disclosing Party.
Limited Disclosure to Representatives
Disclosure is permitted only to employees, agents, or professional advisors on a strict "need-to-know" basis, provided they are bound by confidentiality obligations no less restrictive than those in this Agreement.
Non-Circumvention & Reverse Engineering
1. Non-Circumvention: The Receiving Party shall not bypass the Disclosing Party to exploit business relationships, clients, or opportunities revealed through the Confidential Information.
2. No Reverse Engineering: The Receiving Party shall not reverse engineer, decompile, or disassemble any software, prototypes, or documents received.
Data Protection & Digital Security
The Receiving Party shall implement appropriate technical and organizational measures (encryption, password protection, etc.) to safeguard Confidential Information from unauthorized access or cyber threats, in compliance with the Information Technology Act, 2000.
Term and Survival
1. This Agreement shall remain in force for a period of [e.g., 3 (Three)] years from the Effective Date.
2. The obligation to protect Trade Secrets shall survive indefinitely or for as long as the information remains a trade secret under applicable law.
Return or Destruction of Information
Upon termination or written request, the Receiving Party shall, at the Disclosing Party's option, return or permanently destroy all Confidential Information and provide written certification of such destruction.
Indemnity and Equitable Relief
1. Indemnity: The Receiving Party shall indemnify the Disclosing Party against all losses or damages arising from a breach of this Agreement.
2. Equitable Relief: The Receiving Party acknowledges that a breach may cause irreparable harm for which money damages are insufficient, entitling the Disclosing Party to seek injunctive relief.
Governing Law and Dispute Resolution
1. Governing Law: This Agreement is governed by the laws of India, including the Indian Contract Act, 1872.
2. Arbitration: Any dispute shall be resolved through arbitration under the Arbitration and Conciliation Act, 1996, with the seat of arbitration at [City, e.g., Surat/Mumbai].
3. Jurisdiction: Subject to arbitration, the courts at [City, e.g., Surat/Mumbai] shall have exclusive jurisdiction.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

For the Disclosing Party 

Signature: ____________

Name: ____________

Designation: ____________

Date: ____________

For the Receiving Party