What is a Non-disclosure agreement (“NDA”)?

A non-disclosure agreement is a document that establishes a confidential relationship between the parties to it. The party/parties signing the NDA agree that any sensitive information (such as trade secrets, business arrangements, confidential information) they may obtain shall not be made available to others.  The party sharing such information is known as ‘disclosing party’, and the party with whom such information is shared is known as ‘receiving party’.

Purpose / importance of an NDA?

An NDA is a legally binding contract that helps to safeguard all the confidential information of entities.  It is executed to ensure that your ideas, creativity, work, business information won’t be stolen by the people in course of their work – whether in their capacity as employees or external service providers.

Who can get an NDA?

Any individual or any business entity can enter into an NDA even while discussing their ideas with prospective service providers / business partners or while execution of their transactions. An NDA is a simple document that asserts and establishes the importance of protecting sensitive information.

Legal obligations under an NDA:

An NDA is a legally binding agreement governed by Indian Contract Act, 1872. The party  violating  it is liable to compensate for the damages arising out of such breach.

Is it illegal to violate NDA?

An NDA is a civil contract and its breach doesn’t constitute a criminal activity. However, when breach of an NDA  involves theft of trade secrets, that can be a crime.

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