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Non-disclosure Agreement

Non-Disclosure Agreement (NDA) is an agreement between two parties that prohibits the wrongful disclosure of confidential or sensitive information shared between the two parties to a third party.

Parties involved:

  • Disclosing party

    Disclosing party is the person sharing sensitive information. This can either be an individual or a company.

  • Recipient

    Recipient is the person with whom such sensitive information is being shared “by the disclosing party”. This can also be an individual or a company.

Essentials of an NDA

Purpose

An NDA should clearly mention the purpose of your engagement, the reason for contracting and sharing confidential information, and the capacity in which this information may be used by the recipient.

Confidential information and scope

It should define what information is to be considered as sensitive and confidential. Make sure to include a wide scope for this definition. If you as the disclosing party end up sharing anything important beyond what is explicitly mentioned in the NDA, there should be a possibility of extending the scope of confidentiality.

Scope of confidential obligation

It should explicitly call out the degree of precautions to be undertaken by the recipient in maintaining confidentiality. 

Exceptions to confidential obligations

It should acknowledge and mention the legally recognized exceptions or scenarios in which the recipient may breach their confidentiality obligation.

Term

It should clearly mention the duration of such confidentiality obligations placed on the recipient.

Return of information

It should mention when and how the confidential information is to be destroyed or returned by the recipient, as and when required by you.

Remedies and jurisdiction

It should explicitly mention the State, jurisdiction of courts and applicable laws if any dispute arises out of this agreement. You can also include an option for arbitration to amicably settle any disputes without having to go for litigation.

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Why do you need an NDA?

  • Protection of your sensitive information

    An NDA helps you protect your trade secrets and other valuable information about your business from any misuse. It also helps you recover damages in case of any loss faced due to a breach of confidentiality by the recipient.

  • Clarity

    It clearly lays down what information is to be kept confidential and what is the accepted conduct, leaving no room for any confusion.

  • Trust

    It helps build trust during negotiations and other business engagements as both parties are less likely to misuse each other’s information.

  • IP-Protection

    It ensures that everyone retains their rightful intellectual property rights without fear of infringement. 

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Are you one of these?

  • A business owner sharing your business details with a prospective client 
  • A business owner hiring employees, freelancers, contractors, or vendors who may have access to your sensitive information
  • An entrepreneur disclosing confidential and sensitive information to someone
  • A company sharing confidential information with a third-party

Do you relate to any of these statements?

  • Has unique ideas, information, and business plan and strategy
  • Wishes to have a comprehensive NDA protecting your ideas and uniqueness

Then you definitely need a customized distribution agreement and not just a standard template.