Non-Disclosure Agreement (NDA) Drafting
An NDA agreement keeps your business information private when you share it with an investor, vendor, employee or partner. We draft mutual and one-way NDAs for your review, with a clear definition of what is confidential, how long it lasts and what happens on breach.
What it is
A non-disclosure agreement (NDA), also called a confidentiality agreement, is a contract in which one or both parties promise not to use or reveal information they receive except for an agreed purpose. It is signed before the information changes hands, not after.
India has no separate trade-secrets statute. The Law Commission recommended a Protection of Trade Secrets Bill in its report of 5 March 2024, but it has not become law. Until then, confidential information is protected mainly by contract under the Indian Contract Act, 1872, and by the court-made duty of confidence. Here is the catch: without a signed NDA, you must prove the other side knew the information was confidential. That is far harder to prove.
Who it applies to
You are pitching to investors
You share financials, product plans and customer data during due diligence. If you hold Startup India recognition and an investor asks for the data room, ask for the NDA first.
You send drawings or data to a vendor
Picture a Faridabad die-casting unit that sends mould drawings to a job-worker in Ballabgarh, or a company giving a software vendor access to its data. A one-way NDA protects the side doing the sharing.
You are exploring a deal with another company
When both sides open their books for a joint venture or acquisition, a mutual NDA binds both equally.
Why it matters
Turn a vague duty into a written promise
Without an NDA, you must prove a duty of confidence from the circumstances. With one, the promise is in writing.
Draw the line around what is secret
A clear definition stops the other side from arguing that a price list or drawing was never confidential.
Agree the remedy before anything leaks
The NDA can record that money alone will not repair a leak and that you may seek an injunction.
Documents required
About the parties
- Legal name, address and CIN, LLPIN or PAN of each party
- Name and designation of each signatory
- Board resolution or authority letter, for a company
About the information
- What will be shared, such as drawings or customer lists
- The purpose for which it may be used
- Who on the other side needs access
About the terms
- Mutual or one-way
- How long talks and secrecy should last
- Preferred dispute forum: city courts or arbitration
Mutual vs one-way NDA
| Point | One-way (unilateral) | Mutual (bilateral) |
|---|---|---|
| Who shares | Only one side discloses | Both sides disclose |
| Who is bound | Only the receiving party | Both parties, equally |
| Typical use | Vendor, job-worker, consultant, employee | Joint venture, merger talks, technology tie-up |
| Negotiation | Quick; the discloser sets the terms | Balanced terms, since each side is bound |
| Risk to watch | Receiving party may ask for wide exclusions | A strict clause you want to impose also binds you |
Whatever the type, the standard exclusions are information already public, already known to the recipient, received lawfully from someone else, or developed independently. Disclosure ordered by law or a court is allowed, with notice to the owner.
How it works
List what you are sharing and why
We note the parties, the information, the purpose and whether both sides will disclose.
Draft the NDA for your review
We draft the agreement for your review and revise it after the other side comments. Any legal notice or court filing for a breach must be signed by a practising advocate.
Stamp and sign before disclosure
The NDA is stamped under the law of the state where it is signed, before or at signing, and executed by authorised signatories.
Mark and track what you share
In practice, the NDA works only if you follow it. Label documents “Confidential” and keep a log of what went to whom. When talks end, ask for everything back or destroyed.
Timelines
Sign before you share
Section 17 of the Indian Stamp Act, 1899 requires stamping before or at execution, and the NDA should be signed before the first disclosure.
Disclosure period
The period during which information is shared, often tied to the length of talks, with a right for either side to end it by notice.
Confidentiality period
How long the duty lasts after talks end, commonly two to five years, and longer, or as long as the information stays secret, for trade secrets.
What happens if someone breaches the NDA
An injunction to stop the leak
An NDA is mostly a promise not to do something. Section 42 of the Specific Relief Act lets a court enforce a negative promise by injunction, even where it cannot compel the rest of the contract.
Damages for the loss
Section 73 of the Contract Act gives compensation for loss caused by the breach. A fixed sum named in the NDA is limited to reasonable compensation under Section 74.
Indemnity for third-party claims
An indemnity under Section 124 can make the breaching party cover losses caused by its staff or advisers.
Say a distributor you shared your price list with starts quoting your customers. You want an order within days. For a commercial suit that does not seek urgent interim relief, Section 12A of the Commercial Courts Act, 2015 requires pre-institution mediation first. A leak like this usually needs urgent relief, so the injunction route stays open. Where an invention is involved, file for patent registration before you share the full details, and protect your brand separately through trademark registration.
Frequently asked questions
Is an NDA agreement legally binding in India?
Yes. An NDA is a contract under the Indian Contract Act, 1872, and binds the parties like any other agreement made with free consent for a lawful purpose. It must also be stamped under the stamp law of the state where it is signed, as Section 35 of the Stamp Act keeps unstamped documents out of evidence. Stamp it on signing day and it is ready if you ever need it.
Should I use a mutual or one-way NDA?
Use a one-way NDA when only you are sharing information, and a mutual NDA when both sides will share. A vendor, job-worker or consultant usually signs a one-way NDA. Two companies exploring a joint venture or acquisition usually sign a mutual one. In a mutual NDA every strict clause binds you too, so we set terms you can live with.
How long should an NDA last?
Most NDAs keep the duty of confidence for two to five years after talks end. Trade secrets, such as a formula or source code, are often protected for as long as they stay secret. The NDA should separate the disclosure period from the confidentiality period, and say which clauses survive termination. A defined end date also makes the clause easier to defend if it is ever challenged.
Does India have a trade secrets law?
Not a separate one. The Law Commission recommended a Protection of Trade Secrets Bill in its report of 5 March 2024, but it has not been enacted. Confidential information is protected through contracts like NDAs and the court-made duty of confidence. So the definition of confidential information in your NDA carries the weight. A precise definition gives a court something concrete to enforce.
Can an NDA stop an employee from joining a competitor?
No. An NDA can stop a former employee from using or disclosing your confidential information, but not from working elsewhere. Section 27 of the Indian Contract Act voids restraints of trade, and in Percept D’Mark v. Zaheer Khan (2006) the Supreme Court held that restraints beyond the contract term are void. A confidentiality clause that protects real secrets is enforceable. Keep the two ideas separate and the NDA stays strong.
What remedies are available if an NDA is breached?
You can seek an injunction, damages, or both. Section 42 of the Specific Relief Act, 1963 lets a court enforce a negative promise by injunction, and Section 73 of the Contract Act gives compensation for the loss caused. A liquidated damages figure is limited to reasonable compensation under Section 74. Act quickly once you learn of a leak, since a court weighs delay when deciding on urgent relief.
Is stamp duty payable on an NDA?
Yes. An NDA is an agreement, and stamp duty is charged at the rate set by the state where it is signed. Section 17 of the Indian Stamp Act, 1899 requires it to be stamped before or at execution. In Haryana, e-stamp paper is generated against a GRN on the e-GRAS portal. We confirm the current rate for your state before the paper is bought, so signing day runs to plan.
Should an NDA have an arbitration clause?
It can, but keep the right to go to court for an injunction. Arbitration keeps disputes private, which suits confidential information. Yet a leak often needs an order within days, so most NDAs let either party seek urgent interim relief from a court even when arbitration is chosen. For a suit without urgent relief, Section 12A of the Commercial Courts Act requires pre-institution mediation. A clear forum clause saves days when a leak happens.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
The only government cost is stamp duty at the rate of the state where the NDA is signed. An NDA is not filed with any authority, so there is no filing fee.
Ready to begin?
Tell us what you are sharing and with whom; we will draft an NDA that fits the deal.