There are two types of NDA in practise:
NDA – Casts the obligation of non-disclosure of information on one party only;
or Mutual NDA – Obligation on all the parties to the NDA.
& Conditions of one-way and two-way NDAs are same for both with the only
difference that in the latter, the obligations apply to all the parties to the
General Terms & Conditions required in a NDA
Information and its scope to be defined;
Obligation of Non-Disclosure
of the information to any third party without the permission of the party
sharing such information;
Application of NDA to
apply to all the employees and directors of the recipient company;
to NDA for sharing the information to a third party;
Notice of any
unauthorized disclosure or loss is to be sent by the legal recipient of such
information to the other party;
Use of Confidential
Information is to be “As is” and it is not be construed as a license or
assignment of such information or any intellectual property. Moreover, the
recipient is prevented from selling or registering such confidential
information without prior authorization of the other party;
No reproduction of such
information without the authorization of the providing party;
Time duration of the
Action taken upon
breach of the contract and Injunctive Relief;
Governing law to be
mechanism to be stated;
No Assignment to be
carried out by the recipient without authorization of the other party.
Statutory Law References
2(h) of the Indian Contract Act, 1872.
39.2 of WTO Agreement on TRIPS.
John Richard Brady and
Ors v. Chemical Process Equipments P. Ltd. and Anr, AIR 1987 Delhi 372.
Mr. Anil Gupta and Anr.
v. Mr. Kunal Dasgupta and Ors, 97 (2002) DLT 257.
Important Do(s) & Dont(s)
Lawyer consultation or
online legal advice is preferable to remove any illegalities and ambiguities;
The information is to
be protected for eternity, even after the expiration of the contract unless authorized
by the disclosing party;
Insert a stringent
It is preferable to
have a two-way NDA as it keeps the information flow and protection balanced.