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Non Disclosure Agreement

The Basics of Non-Disclosure Agreement (NDAs)

A NDA agreement is a legally binding document that creates a confidential connection. The person or parties signing the agreement agree that any sensitive information obtained will not be shared with anyone else. An NDA is also known as a secrecy agreement. Continue reading below for additional information on the fundamentals.

The Basics of Non-Disclosure Agreement (NDAs)

NDA Meaning: A non disclosure agreement is a written contract between two people or groups that doesn’t allow them to share confidential information between them. This blog is about Basics of Non-Disclosure Agreement

If you are asked to sign an NDA, you are asked to promise that you will not share any sensitive information with anyone else. People who sign NDAs don’t have to tell anyone else what they know that the person who signed it might have told them.

You can identify a non disclosure agreement by other names like:

  • Confidential Agreement (CA)
  • Confidential Disclosure Agreement (CDA)
  • Secrecy Agreement (SA)
  • Proprietary Information Agreement (PIA)

What Kind of Data does NDA Protect?

NDA agreements are intended to keep private and secret data from becoming public. In the corporate world, NDAs are typically used to safeguard trade secrets (such as methods, formulas, or other internal items that you don’t want your competitors to replicate) or concepts that are still in the works (like business plans, designs for a new product or code for a new app). Get to Know about all the Information for Non Disclosure Agreement for Employees in India.

NDAs are also used to protect the terms of a pending business transaction. (You may have also heard of ‘confidentiality agreements’ – while this phrase is more commonly employed to keep the terms of a business transaction hidden, the two terms are widely used interchangeably.)

The critical point here is that the information must be kept confidential. An NDA can no longer protect information once it has become public. (Various legal mechanisms are available to safeguard general material that you do not want others to reproduce, such as watching your intellectual property.

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2 Types of NDA

In this section, we will discuss the types of NDA’s.

  • Mutual Non-disclosure Agreement

A Mutual Non-Disclosure Agreement, also known as a Mutual Confidentiality Agreement, is a contract in which the parties agree not to disclose any information, such as trade secrets or intellectual information, that is covered by the agreement. This agreement establishes a confidential connection between the parties.

  • The Non-Mutual NDA Agreement

This type of agreement is typically applied to new workers who have access to sensitive company information. In such circumstances, the employee is the only one who signs the agreement and is barred from divulging personal information.

The Content of an NDA

The contents of an NDA are totally dependent on the purpose for which it is being used. As with other contracts, there’s a lot of leeway in how an NDA may be written to ensure that it’s suitable for the circumstance you’re in and the type of material you want to protect.

NDAs, on the other hand, often follow a similar framework, with the contents of each section adjusted to your specific business needs. Most NDA agreements take into account the following:

  • Parties to the Agreement

This may appear basic, but legal considerations must be made on whether specific people or entities are parties to the agreement. Signing in an individual capacity vs signing on behalf of a firm, for example, influences how many persons are covered by the NDA agreement and the penalty for breaching the agreement.

  • The Types of Information Thought to be Confidential

Depending on the type of information revealed and whether one party is revealing confidential information (referred to as a ‘unilateral NDA’) or both parties are disclosing confidential information to each other (referred to as a ‘bilateral NDA’).

What is considered confidential may differ for both parties. It’s also critical to strike a balance between being broad enough to include all forms of confidential information that a party will divulge and detailed enough to ensure the basics of non-disclosure agreement is enforceable.

  • Rights and Obligations of Each Party

Similarly, depending on who is sharing what and whether the NDA is unilateral or bilateral, secrecy rules may apply differently to various parties.

  • Exceptions to the Obligations of Confidentiality

Most NDAs provide exceptions for occasions where you may need to divulge the secret information, such as discussing it with your lawyer or complying with a legal requirement.

  • Duration

For some forms of information, confidentiality responsibilities may not need to last long — for example, information that will only be kept private momentarily (such as a product launch) or that will not be nearly as useful in the future (like fast-changing technology).

Other forms of information must be kept confidential for a considerably extended period of time (like trade secrets). The balancing principle applies here as well, with the goal of ensuring that the term is long enough to provide the required protection but not so lengthy that it becomes unenforceable.

  • Remedies for NDA Violations

One of the most critical concerns in an NDA is what should happen if a party unintentionally discloses sensitive information. Remedies are intended to compensate you for the consequences of disclosing your confidential information; thus, the appropriate remedies will depend on the potential repercussions.

When Should You Use an NDA?

The primary advantage of NDAs is that they protect your confidential information. Non-disclosure agreements should cover any private information that you believe is beneficial to your firm.

The requirement for an Legal NDA depends on the type of transaction and if you need to release secret information before the transaction is finalized.

You should plan ahead – English law permits you to make NDAs more explicit later on, but it does not allow you to broaden their reach. If employees fail to maintain information confidentiality, the NDA will enable you to sue and recover damages.

When launching a new firm, you may not think about how to secure your assets from future dangers. In fact, you may believe at first that you have no assets to safeguard. This is entirely false. Your ideas and intellectual property can have significant value in the early phases of a firm, especially a start-up, and must be secured at all costs. You Can get more Information about the MSA For Business Online.


NDAs are incredibly valuable in business, and they are a crucial tool to understand when it comes to important business talks. When disclosing proprietary information before a deal is finalised, a well-drafted basics of non-disclosure agreement provides additional security.

NDAs must be tailored to ensure that they give adequate protection and are enforceable if something goes wrong. It is critical to seek customised legal counsel to ensure that your NDA prevents rather than creates future issues.

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